CANADA STOCKS-TSX slumps as Fed mulls stimulus exit

Wed Jun 19, 2013 4:44pm EDT
 
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* TSX falls 99.17 points, or 0.80 percent, at 12,268.29
    * Seven of 10 main sectors decline
    * BlackBerry slips 3.6 percent after downgrade

    By John Tilak
    TORONTO, June 19 (Reuters) - Canada's main stock index
slipped on Wednesday after comments by the U.S. Federal Reserve
that it could begin rolling back its stimulus program this year
weighed on investor sentiment and caused declines across most
sectors. 
    Fed Chairman Ben Bernanke said the U.S. central bank expects
to slow the pace of its bond purchases later this year and bring
them to a halt around mid-2014. 
    Financial shares took the biggest toll on the market, while
the gold-mining sector posted the sharpest decline, falling with
the price of bullion. 
    The mood was further dented as smartphone maker BlackBerry
 fell 3.6 percent after a brokerage downgraded its
shares. 
    "That was not what I would call a 'shock and awe' kind of
announcement," Michael Sprung, president of Sprung Investment
Management, said of the Fed's intention to reduce its bond
purchases. "But perhaps people were looking for a bit longer
run-time."
     "The rates will likely go up," he added. "The markets are
going to be concerned about how much of a break that will be on
the economy."
     The Toronto Stock Exchange's S&P/TSX composite index
 closed down 99.17 points, or 0.80 percent, at
12,268.29. 
    The Canadian market is in negative territory for the year. 
     For the TSX to take off, investors would need to see a
rebound in commodity prices, as well as increasing signs of
growth in China and other parts of Asia, said Julie Brough, vice
president at Morgan Meighen & Associates. 
    "That's what Toronto is waiting for," she said. "You need
that extra bit of momentum to lift the resource stocks."
    In a Reuters poll released this week, analysts forecast the
resource-heavy Toronto stock index, which has struggled to gain
traction in 2013, would kick into gear in the second half of the
year as the global economy rebounds. 
     Seven of the 10 main sectors on the index were in the red
on Wednesday.
     Financials, the index's most heavily weighted sector, gave
back 0.5 percent. Royal Bank of Canada, the country's
biggest lender, declined 0.8 percent to C$60.69 and was one of
the most influential influences on the index.
    BlackBerry's stumble, to C$14.58, caused the information
technology sector to fall 0.8 percent.
    Energy shares lost 0.5 as a decline in the price of oil also
weighed. Enbridge Inc gave back 2.1 percent to
C$44.77, and Suncor Energy Inc fell 0.8 percent to
C$31.51. 
    Imperial Oil Ltd said that it was unable to find a
buyer for its refinery in Dartmouth, Nova Scotia, and will
instead convert the facility into a terminal operation. The
stock was up 0.3 percent at C$40.63.