CANADA STOCKS-TSX gets cautious, falls on profit-taking

Tue Sep 1, 2009 4:51pm EDT
 
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* TSX down 178.43 points, or 1.64 percent, at 10,689.78

* Financials, down 2.9 pct, lead TSX lower

* Market shrugs off prospect of Canadian election (Adds official closing figures, details, quotes)

By Jennifer Kwan

TORONTO, Sept 1 (Reuters) - Toronto's main stock index fell on Tuesday as investors took profits in financial stocks after strong earnings last week and as the market grew cautious about a rally that has driven the index up about 40 percent since early March.

Heavyweight decliners included Royal Bank of Canada (RY.TO: Quote), down 1.7 percent at C$55.52, and Bank of Nova Scotia (BNS.TO: Quote), which dropped 4.2 percent to C$43.92. Insurer Manulife Financial (MFC.TO: Quote) fell 3.7 percent to C$21.70.

The index's financial group as a whole dropped 2.9 percent. It is up 34 percent so far this year.

"There are likely some investors out there that are questioning near-term valuations because the stocks are pricing in heavy expectations going forward," said Gareth Watson, Canadian equity advisor at ScotiaMcLeod.

"I wouldn't be surprised that you're just seeing some profit-taking from last week's strong performance."   Continued...