CANADA STOCKS-TSX drops as weaker U.S. crude hits energy shares

Mon Jun 25, 2012 4:52pm EDT
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* TSX ends down 105.15 points, or 0.92 percent, at 11,330.39
    * Energy stocks lead market lower as U.S. crude falls
    * Losses offset by gold miners, fertilizer producers

    By Allison Martell
    TORONTO, June 25 (Reuters) - Canada's main stock index
dropped on Monday, touching its lowest point in almost three
weeks, led by weaker energy stocks as U. S. crude oil fell, with
investors worried about the euro zone debt crisis ahead of a
major summit this week.
    Global equity markets fell on investor skepticism that a
June 28-29 European Union summit would produce substantive
measures to tackle the debt crisis. 
    U.S. crude prices were also lower on summit doubts and as
the first named storm to hit the Gulf of Mexico this Atlantic
hurricane season missed production-rich areas. 
    "If Europe brings the global economy into a big recession,
there's a huge risk to the Canadian market because of its
exposure to resources," said Marc-Andre Robitaille, president
and portfolio manager at Robitaille Asset Management in
    The Toronto Stock Exchange's S&P/TSX composite index
 closed d own 105.15 points, or 0.92 percent, at
11,330.39. Th e index at one point hit 11 ,295.06, its weakest
level since Jun e 4.
    "Europe remains a very large cause for concern," said Marco
Lettieri, economist at National Bank Financial in Montreal.  
"As a result there's a high risk premium that continues to be
put on to the market."
    The heavyweight energy group played the biggest role in
leading the market lower, dropping 2 .1 p ercent. Financial issues
declined 1. 4 pe rcent.
    Leading decliners included Royal Bank of Canada,
which fell 1 .9 p ercent to C $50.95, while Suncor Energy 
fell 2. 0 p ercent to C$ 27.71.
    Encana Corp was also among the major weights on the
index, losing 3 .7 p ercent to hit C $19.61.
    In addition to weaker energy prices, a Reuters investigation
found that Encana plotted with Chesapeake Energy Corp to
suppress land prices in Michigan. In response to questions from
Reuters on the matter, Encana said it was undertaking an
internal investigation. 
    Losses in energy and bank stocks were partly offset by gains
in the materials group, h elped by gold miners and fertilizer
    Goldcorp Inc rose 3.2 percent to C$39.17 as euro zone
worries boosted safe-haven buying of bullion. 
    Potash Corp rose 2.1 percent to C$42.24 and Agrium
Inc was 1 .2 p ercent higher at C $87.86 a fter corn
futures rose on the Chicago Board of Trade, as dry weather
threatened to cause more harm to the U.S. corn crop.
[ID: nL3E8HP37D]
    Shares of the fertilizer makers typically track the prices
of fertilizer-intensive corn closely, as higher grain prices are
likely to spur farmers to increase crop nutrient utilization.