CANADA STOCKS-TSX retreats after bin Laden death, election eyed

Mon May 2, 2011 5:17pm EDT
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   * TSX drops 10.28 points, or 0.07 percent, at 13,934.51
 * Eight of 10 index sectors rise, led by financials
 * Gold prices fall from record high after bin Laden death
 * Canadian election day overshadowed by bin Laden news
 (Updates with details, comments)
 By Solarina Ho
 TORONTO, May 2 (Reuters) - Toronto's main stock index
closed lower on Monday, after hitting a three-week high earlier
in the day, as oil and gas stocks erased gains and the death of
Osama bin Laden sapped some of the safe-haven premium out of
 The overall materials group, home to gold miners, was down
2.05 percent while the gold sub-index was off 2.69 percent.
 Gold miners were hit hard as gold prices fell off record
highs as bin Laden's death eroded their safe-haven appeal.
Goldcorp (G.TO: Quote) was the biggest heavyweight decliner, down 5.24
percent at C$50.12, followed by Barrick Gold (ABX.TO: Quote), which
fell 2.24 percent to C$47.24. Agnico Eagle (AEM.TO: Quote) gave back
3.84 percent to finish at C$63.39.
 Energy stocks ended the day off 0.01 percent. They shadowed
movements in oil prices, which seesawed through the session as
investors weighed the impact of Osama bin Laden's death on
crude futures. [O/R] One of the biggest movers, Imperial Oil
(IMO.TO: Quote), was down 1.14 percent at C$49.43.
 "It looks like the market's not quite sure how to take the
death of bin Laden," said Laura Lau, senior portfolio manager
at Sentry Select Capital Corp.
 "Right off the bat oil was down, then it went up, and then
it went down again, so they're not quite sure if it's good or
bad. What we would expect is there probably will be some
retaliation from terrorists for the deaths. Because of that, we
can certainly expect added political risk," she said.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished the day down 10.28 points, or 0.07 percent
at 13,934.51 after rising more than 1 percent to as high as
14,089.10, its strongest level since April 11, early in the
day. Eight of the index's 10 sectors were higher.
 Financial stocks, which make up roughly a third of the
index's weight, were up 0.81 percent.
 The rise was led by Manulife Financial (MFC.TO: Quote), which
advanced 3 percent to C$17.50, and by Bank of Nova Scotia
(BNS.TO: Quote), which was up 1.23 percent at C$58.40.
 Monday was election day in Canada but voting was
overshadowed by the bin Laden news. Toronto stocks had traded
cautiously in the final week leading up to the vote, with
analysts attributing some of the retreat to wariness inspired
by the surge of the left-leaning New Democratic Party in public
opinion polls. [ID:nN29174448]
 The right-of-center Conservatives, who have governed Canada
since early 2006, started the campaign with a healthy lead in
the polls, but that dwindled as the NDP pushed past the
Liberals to take a strong second place. [ID:nN02201446]
 "It's certainly most worrisome if the NDP were to become
official opposition. We would certainly be concerned about
increased spending and increased taxation," said Lau, adding
that energy stocks could be in focus because of the possibility
of added environmental costs.
 ($1=$0.95 Canadian)
 (Editing by Peter Galloway)