CANADA STOCKS-TSX slides after Draghi comments

Thu Aug 2, 2012 11:45am EDT
 
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* TSX down 75.05 pts, or 0.6 pct, at 11,543.48
    * Energy shares lead losses on weak earnings results
    * ECB's Draghi disappoints with no new stimulus

    By Jon Cook
    TORONTO, Aug 2 (Reuters) - Toronto's main stock index was
lower in volatile trade on Thursday morning, led by energy
shares, as comments from European Central Bank President Mario
Draghi disappointed investors.
    Markets had anticipated Draghi would announce fresh
crisis-fighting measures after saying last week the ECB would do
all it could to preserve the euro. But the ECB left its
benchmark interest rate unchanged and Draghi largely repeated
previous bank policy at his monthly news conference, leaving
open the possibility of future action but providing no
surprises.  
    The ECB statement came a day after the U.S. Federal Reserve
also opted not to announce any new stimulus measures. 
    Equities rebounded from sharp losses earlier as both banks
signaled they may act down the road if economic conditions
worsen.
    "Maybe they're telling us that this economy can try to get
back on its feet on its own," said Mike Newton, portfolio
manager at Macquarie Private Wealth Inc.
    "If the market doesn't stabilize by mid-September then we'll
likely hear a whole other round of coordinated efforts by these
entities."
    Sentiment was also helped by U.S. economic data on Thursday
that showed American jobless claims rose less than expected last
week. Investors were hopeful it augured well for Friday's key
non-farm payrolls report for July. 
    Canada's resource-heavy index was dragged down by the
heavily weighted energy sector, which fell 1.5 percent. A
combination of lower oil prices and weak earnings results from
Enbridge Inc and Petrominerales Ltd hurt
energy shares.
    Enbridge slid 1.1 percent to C$40.04 after the pipeline
operator reported a sharp fall in second-quarter profit due to
losses on financial derivatives. 
    Petrominerales Ltd shares plummeted 16 percent to
C$7.74 after the oil and gas producer's second-quarter adjusted
profit fell 66 percent on lower oil prices and oil sales.
 
    Around 11:30 a.m. (1530 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 75.05 points, or 0.6
percent, at 11,543.48. The index rebounded after touching a
session low 11,475.43 shortly after Draghi's remarks.
    "The volatility is really troublesome," said Newton, who
said it was reflected in the market's reaction to earnings
results.
    Canada's influential materials sector, which includes
miners, was down 0.4 percent. Losses were led by Potash Corp
, which fell 3 percent to C$42.60.
    Kinross Gold Corp slid 1.6 percent to C$7.88 after
the company - one of Canada's largest gold miners - said on
Wednesday it had replaced long-time CEO Tye Burt, who
spearheaded its massive acquisition of Red Back Mining that has
so far failed to live up to expectations. Kinross, which reports
second-quarter results next week, named Paul Rollinson its new
Chief Executive. 
    First Quantum Minerals Ltd led gains, jumping nearly
7 percent to C$19.14 after the base metal miner said on
Wednesday its second-quarter profit fell slightly as lower
copper prices and higher production costs outweighed higher
copper and gold sales volumes. On Thursday National Bank
Financial raised its price target on the miner to C$23 from
C$21.            
    Shares of New Gold Inc also climbed 3.8 percent to
C$10.38 a day after the miner reported a lower second-quarter
profit, but the number was in line with expectations.
 
    In other earnings news, shares of Valeant Pharmaceuticals
International rose nearly 3 percent to C$48.55 after
the drugmaker reported a second-quarter net loss on Thursday as
costs rose, but adjusted cash earnings rose and the company
raised its forecast for full-year cash results.