CANADA STOCKS-TSX has biggest drop in 2 months as Syria fears mount

Tue Aug 27, 2013 5:13pm EDT
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* TSX falls 169.09 points, or 1.33 percent, to 12,591.21
    * All 10 main index sectors decline
    * Gold miners drop sharply despite bullion gains
    * BMO rises after results; Scotiabank slips

    By John Tilak
    TORONTO, Aug 27 (Reuters) - Canada's main stock index
recorded its biggest single-day percentage decline in more than
two months on Tuesday as the likelihood grew that the West will
launch a military strike against the Syrian government.
    Concern over the fallout from poison gas attacks by the
Syrian government took the market spotlight away from two of the
country's biggest banks, Bank of Montreal and Bank of
Nova Scotia, which reported quarterly earnings that
topped expectations.
    Sharp gains in commodity prices also failed to boost
sentiment. The uncertainty about Syria fueled a rush to gold, a
perceived safe-haven asset, and bullion prices hit a three-month
high. Oil prices surged to a six-month high as any instability
in the Middle East would create supply problems.  
    Despite its resource-heavy composition, every major sector
on the index ended in the red.
    The United States and its allies could attack Syria within
days, Western envoys have told rebels fighting President Bashar
    "There are a few negative vibrations in the market," said
Michael Sprung, president of Sprung Investment Management.
"Turmoil in the Middle East could cause a spike in oil prices,
which could result in a slowdown in economic activity."
    "Investors should be looking for opportunities as some of
the better companies sell down, opportunities to buy in and
increase the quality of the holdings in their portfolio," he
    The Canadian market, which hit a three-month high the
previous session, reflected weakness across world stock markets
spurred by worry over Syria. 
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 169.09 points, or 1.33 percent, at
12,591.21, its biggest drop since June 20. 
    The materials sector, which includes mining stocks, fell 3.7
percent, with gold miners losing more than 4 percent. Goldcorp
Inc slipped 4.6 percent to C$31.35, and Barrick Gold Corp
 was down 4.1 percent to C$20.64.
    Energy shares were little changed as gains in the oil price
benefited some producers. Canadian Natural Resources Ltd
 rose 1 percent to C$31.74, and Suncor Energy Inc
 climbed 0.8 percent to C$36.11.
    Financials, the index's most heavily weighted sector, lost
1.1 percent. Toronto-Dominion Bank fell 1.3 percent to
    Shares of Bank of Montreal hit a 52-week high after the
company said its third-quarter profit rose 17 percent,
benefiting from higher insurance income and lower provisions for
bad loans. The stock eased back from its high and closed up 0.4
percent at C$66.05. 
    Bank of Nova Scotia posted a slightly stronger-than-expected
quarterly profit and raised its dividend. Its stock slipped 1.7
percent to C$57.71.
    "(The results) foster the reputation that Canadian banks
have had, that they're a pretty safe place to invest your money,
with regular dividend increases and higher profits," said Fred
Ketchen, director of equity trading at ScotiaMcLeod, who owns
shares of both Scotiabank and BMO.