CANADA STOCKS-TSX skids as golds tumble with bullion prices

Tue Jan 4, 2011 5:32pm EST
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   * TSX down 40.91 points, or 0.3 percent at 13,402.31
 * Eight of the 10 main groups higher
 * Gold prices drop more than 2 percent
 (Adds details, comments)
 By Solarina Ho
 TORONTO, Jan 4 (Reuters) - Toronto's main stock index
finished the first trading day of 2011 lower on Tuesday as
blue-chip gold miners were hit by slumping bullion prices.
 The gold price had its biggest one-day loss since early
November, dropping more than 2 percent as profit-taking and
hints of an improving global economy diminished safe-haven
buying of the precious metal. [GOL/]
 Falling gold-mining shares weighed on the index's materials
group, which finished down 1.73 percent.
 Top producer Barrick Gold ABX.TO fell 2.88 percent to
C$51.59, while Goldcorp G.TO skidded 3.01 percent to C$44.50.
Kinross Gold K.TO slid 4.07 percent to end at C$18.14, while
Agnico Eagle AEM.TO sank 6.37 percent to finish at C$71.72.
 "Today was mostly just people who'd made so much money in
the last few months, they wanted to take some profits ... I
don't think it was seriously negative in any way," said Douglas
Davis, chief executive at Davis-Rea.
 The big financial group was the only other decliner among
the index's 10 main sectors, dipping 0.21 percent in a mixed
 Bank of Nova Scotia BNS.TO slid 1.42 percent to C$56.29
and Royal Bank of Canada RY.TO fell 0.34 percent to C$52.14.
That offset advances by Manulife Financial MFC.TO, which rose
0.7 percent to C$17.27, and Bank of Montreal BMO.TO, which
gained 0.31 percent to C$57.66.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 40.91 points, or 0.3 percent, at
13,402.31. Early on Tuesday, the TSX hit its highest level
since August 2008, before beginning its retreat.
 "We expect this volatility to continue ... We expect the
market to do better as the year goes on. However, there's going
to be bouts of negativity," said Irwin Michael, portfolio
manager at ABC Funds.
  "The U.S. economy seems to be slowly stumbling back, I'm
mildly optimistic, I'm not extravagantly optimistic. If you
made me pick up or down, I would pick up, but slowly," Davis
 The index finished 2010 with its best December in five
years and a gain of 14.4 percent for the year.
 "The bottom line is that markets are very thin, markets are
skittish here as well," Michael said.
 "A lot of people are getting back in the saddle so to speak
and we don't expect definite trends to take place. You've got
to give it a week or so."
 Tempering losses was a 0.19 percent gain by the hefty
energy group. Penn West Energy Trust PWT_u.TO rose 2.77
percent to C$24.50.
 Baffinland Iron Mines Corp BIM.TO shares rose 1.4 percent
to C$1.45. ArcelorMittal, the world's largest steelmaker, and
private-equity backed Nunavut Iron have been battling for
control of the Canadian-based miner, which has recommended
ArcelorMittal's bid. ArcelorMittal said on Tuesday it would not
raise its C$550 million bid. [ID:nLDE7020A0]
 Shares of Enbridge ENB.TO, which plans to shut a U.S.
Midwest oil pipeline twice over the next two months to make
repairs, fell 1 percent to C$55.71. [ID:nN04227519]
 ($1=$1.00 Canadian)
 (Reporting by Solarina Ho; editing by Peter Galloway)