CANADA STOCKS-TSX flat as Fed comments offset China rate cut
* TSX down 10.81 points at 11,622.59 * Earlier hit highest level in nearly 4 weeks * Global stocks rally on surprise China rate cut * Sliding gold stocks keep TSX under pressure * Barrick Gold key drag on index By Jennifer Kwan TORONTO, June 7 (Reuters) - Toronto's main stock was little changed on Thursday as gold stocks skidded after U.S. Federal Reserve Chairman Ben Bernanke offered no hints that further stimulus was imminent, halting a market rally fueled by a surprise interest rate cut in China. Gold tumbled 2 percent as the comments by Bernanke prompted investors to unwind bullish bets on expected easing after last week's dismal U.S. jobs report. "Bernanke didn't give the green light towards quantitative easing, a factor that would've supported gold," said Fergal Smith, managing market strategist at Action Economics. "That's been a disappointment for folks who are long gold." Bullion was hit especially hard as it has been heavily used by institutional investors to hedge against the economic uncertainties brought by monetary easing. At around 1:20 p.m. (1720 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 10.81 points, or 0.09 percent, at 11,622.59. Gold stocks kept the broader index from joining a global stocks rally. Barrick's was down nearly 5 percent at C$39.50 after the surprising ouster of Chief Executive Aaron Regent on Wednesday raised more questions than it answered for anxious investors. Goldcorp sank 3.8 percent to C$39.72, and Yamana Gold was down 3 percent at C$16.05. Earlier, the main stock index had risen as high as 11,727.58, its strongest level since May 11, as China delivered twin surprises on interest rates, cutting borrowing costs to combat faltering growth while giving banks additional flexibility to set competitive lending and deposit rates. Given weak U.S. data and troubles in Europe, there has been rising speculation of more stimulus measures from global central banks. "It shows the Chinese authorities recognize that the slowdown in China has gone far enough," said Gavin Graham, president at Graham Investment Strategy. "That means there's likely to be an increase in demand for commodities and an increase in demand for the Chinese domestic economy, which will help world trade and therefore commodity-based, resource-based markets like Canada." Diversified miner Teck Resources was up 2.8 percent at C$33.20 and Cenovus climbed 3 percent to C$33.42. Suncor Energy rose 1.6 percent to C$29.72 and First Quantum was higher by 2.3 percent at C$18.55. Yogawear retailer Lululemon Athletica Inc was down 8 percent at C$66.20 after its said that inventories rose and sales growth in established stores would slow.
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