CANADA STOCKS-TSX ends lower as Cyprus concerns weigh

Tue Mar 19, 2013 5:15pm EDT
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* TSX falls 7.89 points, or 0.06 percent, to 12,773.87
    * Six of 10 main sectors advance
    * Rona shares up 4 percent on CEO appointment
    * Golds rise as investors see safe haven amid Cyprus worries

    By John Tilak
    TORONTO, March 19 (Reuters) - Canada's main stock index
closed slightly lower on Tuesday, hurt by widespread declines in
the materials, energy and financial sectors, after a crucial
vote in Cyprus threatened to push the country into default.
    Worries that Cyprus will reignite Europe's debt crisis took
a toll on oil prices, which slumped to a three-month low and
were a drag on the energy sector. 
    Cyprus's parliament overwhelmingly rejected a proposed levy
on bank deposits as a condition for a European bailout. The
rejection threw euro zone efforts to rescue the latest casualty
of the currency area's debt crisis into disarray. 
    "The news from Cyprus is bringing Europe back to the
forefront in investors' minds," said Youssef Zohny, portfolio
manager at Stenner Investment Partners, a unit of Richardson
GMP. "There's some headline risk coming out of Europe."
    Zohny said his concern was the economic situation in Cyprus
could give investors an excuse to sell.
    The developments from the island revived broader concerns
about the euro zone economies and got some analysts talking
about spillover consequences. 
    "The long-term repercussions are very, very serious," said
Gavin Graham, president at Graham Investment Strategy. "Canadian
investors should be concerned about the knock-on effects (on the
euro zone)."
    However, supporting the market was data that showed
groundbreakings for U.S. homes rose in February and that new
permits for construction climbed to the highest level since
2008, a sign the housing recovery there is gathering steam.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 7.89 points, or 0.06 percent, at
    Still, market strategists expect Canadian stocks will rise 8
percent this year, a Reuters poll found, with an improving
global economy expected to boost the badly-lagging shares of
natural resource companies. 
    Six of the 10 main sectors on the index were higher on
    Energy shares fell 0.4 percent. Cenovus Energy Inc 
declined 1.3 percent to C$32.34. However, pipeline company
TransCanada Corp added 1.2 percent to C$49.49 and had
the biggest positive influence on the market. 
    The materials group, which includes mining stocks, slipped
0.3 percent. A nearly 5 percent fall in Teck Resources Ltd
 to C$28.45 and a 5 percent decline in First Quantum
 to the C$20.35 weighed on the sector. 
    A rise in gold prices, which touched a 2-1/2 week high as
their attraction as a safe haven increased on the Cyprus
concerns, softened the blow a little by lifting gold stocks.   
    Shares of Rona Inc, a home-improvement retailer and
distributor, climbed 4 percent to C$10.98 after it said Metro
Inc executive Robert Sawyer will take over as its chief
executive as it looks to turnaround its business.
    Graham said he views Sawyer's experience at grocer Metro as
a positive. "He comes with a good pedigree. He understands the
Québec market, as well as the Anglophone market."
    Shares of Lululemon Athletica Inc fell 2.6 percent
to C$65.74. Analysts trimmed their expectations on the clothing
maker a day after it warned that a recall of batches of its
black signature yoga pants would significantly affect its