CANADA STOCKS-TSX knocked lower as materials falter on weak gold

Wed Feb 29, 2012 11:39am EST
 
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* TSX down 107.69 points at 12,632.78

* Materials group falls 2.4 percent

* Six of 10 main sectors lower

By Jennifer Kwan

TORONTO, Feb 29 (Reuters) - Toronto's main stock index turned lower on Wednesday morning as materials issues faltered on weak gold prices, which skidded after comments by U.S. Federal Reserve Chairman Ben Bernanke helped to push up the U.S. dollar.

The key materials sector, which accounts for some 20 percent of the broader Toronto index, was down 2.4 percent to lead the market lower. Barrick Gold fell nearly 3 percent to C$47.79 and Goldcorp sank 3 percent to C$48.10 on weaker gold prices.

Gold prices fell more than 3 percent on Wednesday as the euro tumbled to a session low against the U.S. dollar after Bernanke suggested the Fed was unlikely to engage in more monetary easing in the short term.

"In our view, there had been a lingering perception that he might announce or give a stronger hint toward quantitative easing. Some of that probability filtered out of the market so the (U.S.) dollar jumped when he didn't make any further reference towards that, gold pulled back and Treasury yields moved higher," he said.

"The fact that the (U.S.) dollar jumped at the time was probably a negative factor for stocks."   Continued...