April 6, 2009 / 8:59 PM / in 8 years

CANADA STOCKS-TSX drops, but rebounds from big early losses

* TSX recovers from session low

* U.S. bank commentary shakes financials

* TSX pressured by lower commodity prices, Barrick hit (Adds details, analyst’s comments, updated numbers)

By Ka Yan Ng

TORONTO, April 6 (Reuters) - Toronto’s main stock index closed lower on Monday but clawed back some of its early losses as rebounds in the heavyweight financial and energy groups offset falling gold miners.

The falling price of gold, which hit its lowest level since late January, put heavy pressure on the index’s materials group. Shares of Barrick Gold (ABX.TO), the main drag on the index, fell 4.56 percent to C$35.61, while Goldcorp (G.TO) was down 1.8 percent at C$37.40. The materials group as a whole ended 2.9 percent lower.

The index fell sharply in the morning as a U.S. analyst’s note sapped optimism about the bank sector. A Calyon Securities analyst initiated coverage on some large U.S. banks with “underperform” or “sell” ratings, citing risk-taking by banks in several areas. [ID:nN06391861]

The index’s financial group fell more than 1 percent, but finished the day down 0.75 percent. Toronto-Dominion Bank (TD.TO) fell 2 percent to C$45.26.

Energy issues recovered most of their early losses by session’s end as the price of oil, a key Canadian export, bounced off its lows and was above $51 a barrel. The energy sector ended nearly flat, down 0.01 percent.

The S&P/TSX composite index .GSPTSE closed down 49.59 points, or 0.55 percent, at 9,016.17, paring losses from a session low at 8,918.98. Six of the index’s 10 main groups were lower.

“It’s still a fairly resilient market,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. “It’s off, but not that much, considering the runup that we’ve had. I think the real test now is that earnings are upon us.”

The lower finish for the index follows four weeks of gains that started when it bounced off its lowest level in five years.

$1=$1.24 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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