CANADA STOCKS-Oil worries spur TSX to flee 32-month high

Mon Mar 7, 2011 5:10pm EST
 
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 * TSX down 160.42 points, or 1.1 pct, at 14,092.35
 * All 10 index sectors weaker
 * U.S. oil futures end above $105 a barrel
 * Gold hits record above $1,440, silver highest since 1980
 (Adds details, comments)
 By Claire Sibonney
 TORONTO, March 7 (Reuters) - Toronto's main stock index
fell sharply on Monday, retreating from a near three-year high
on fears that rising oil prices and instability in North Africa
and the Middle East would damage the global economic recovery.
 The index's energy sector ended down 1.5 percent, backing
away from an early rally, as increasing violence in Libya and
rumors that leader Muammar Gaddafi was seeking an exit deal
contributed to a volatile day for oil prices. Still, U.S. crude
futures settled higher, above $105 a barrel. [O/R]
 "The global macro environment seems to have entered a new
phase of uncertainty and that could have triggered a bout of
profit-taking on the TSX," said Elvis Picardo, an analyst and
strategist at Global Securities in Vancouver, noting the TSX
hit a 32-month high shortly after the open.
 Picardo said the uncertainty is measured by the fact that
both energy and gold-mining issues were down sharply despite
oil prices well above $100 a barrel and gold reaching a record
high above $1,400 an ounce. [GOL/]
 Suncor Energy (SU.TO: Quote) dropped 1.8 percent to C$45.57, and
Canadian Natural Resources (CNQ.TO: Quote) plunged 3.2 percent to
C$48.10.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 160.42 points, or 1.13 percent, at
14,092.35. Earlier in the session, it rose as high as
14,329.49, its highest level since July 2008.
 All of the index's 10 main sectors were weaker.
 The index's financial group fell 0.5 percent with
Toronto-Dominion Bank (TD.TO: Quote) shedding 0.9 percent to C$82.88
and Bank of Montreal (BMO.TO: Quote) losing 0.6 percent to C$61.36.
 "Investors are trigger happy at this point ... the fact
remains that the TSX remains just a few hundred points from its
all-time high and there definitely is a section of the market
that feels that level for the TSX may not be sustainable in the
short term," Picardo said.
 "As long as we have this continued uncertainty it's going
to be a case of selling on the rallies rather than buying the
dips."
 The materials sector, home to base-metal miners and
fertilizer producers -- both proxies for economic growth --
finished down 1.3 percent, as the price of copper suffered its
biggest one-day decline in nearly four months. [MET/L]
 Fertilizer producer Potash Corp (POT.TO: Quote) tumbled 3.2
percent to C$57.49, and diversified miner Teck Resources
TCKb.TO lost almost 3 percent at C$52.53.
 "Appetite for risk has been reduced and everyone is
building more of a defensive portfolio right now," said Francis
Campeau, broker at MF Global Canada in Montreal, noting a
similar move lower on U.S. stock markets.
 Precious metals miners also shifted from gains to losses,
tracking swings in oil, as the price of gold climbed into
record territory and silver hit its highest point since 1980.
 The subsector was off 0.6 percent as Goldcorp (G.TO: Quote)
slipped 0.2 percent to C$48.62 percent. However, Barrick Gold
Corp (ABX.TO: Quote) rose 0.3 percent to C$51.53 and Silver Wheaton
(SLW.TO: Quote) advanced 0.2 percent to C$43.74.
 ($1=$0.97 Canadian)
 (Reporting by Claire Sibonney; editing by Peter Galloway)