CANADA STOCKS-TSX snaps 4-day rise on currency swings

Fri Oct 9, 2009 5:20pm EDT
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 * TSX drops 0.41 pct to 11,436.92, ends week up 4.4 pct
 * Gold miners slide on lower bullion price, rallying US$
 * Big gain in Canadian jobs spurs C$ rise, rate hike talk
 * Muted action ahead of holiday weekend
 (Adds details, comments)
 By Ka Yan Ng
 TORONTO, Oct 9 (Reuters) - Currency swings played a big
role on Friday in knocking Toronto's main stock index to its
first lower close this week.
 The Canadian dollar, pushed higher by unexpected strength
in the jobs market, created discomfort for exporters, while a
surge by the U.S. dollar put resource issues under pressure.
 Heavyweight miners such as Barrick Gold Corp (ABX.TO: Quote)
dropped 0.96 percent to C$41.25, while Goldcorp (G.TO: Quote) slid
0.78 percent to C$44.25 as the price of gold backed away from
record highs hit earlier this week. [GOL/]
 Potash Corp (POT.TO: Quote) led all notable decliners, shedding
3.6 percent to C$94.44, after Dahlman Rose & Co initiated
coverage of the fertilizer company with a "sell" rating. It
gave rival Agrium (AGU.TO: Quote) a "buy" rating, but the stock moved
lower with most of the materials group, falling 2.8 percent to
C$53.93. [ID:nBNG467431]
 "A lot of today's action is driven by currencies," said
Elvis Picardo, analyst and strategist at Global Securities in
Vancouver. "There is increasingly speculation that we may see
rate hikes sooner rather than later in Canada."
 The S&P/TSX composite index .GSPTSE closed down 47.59
points, or 0.41 percent, at 11,436.92, ending the week up 4.4
percent. Eight of the index's 10 main groups were lower.
 The consumer staples group was one sector that outperformed
the broader market, partly because the jobs report showed a
surprisingly drop in the unemployment rate. This could bode
well for a stronger consumer backdrop in the lead-up to the
all-important Christmas shopping season, analysts said.
 "It's not a surprise on a day like this to see the consumer
sector in Canada hold in a little bit better than industrials,
finance, resources -- those sectors that are much more
sensitive to overvaluation of the currency," said Andrew Pyle,
wealth adviser and associate portfolio manager at
 U.S. Federal Reserve chairman Ben Bernanke said at a
conference on Thursday he was thinking of an exit strategy from
quantitative easing and low interest rates as the U.S. economy
improves. [ID:nN08537898]
 That sparked a broad rally by the U.S. dollar against major
many currencies on Friday, but not against the Canadian dollar,
which  shot to a one-year high to nearly 96 U.S. cents because
of the employment report. [ID:nN0986362]
 The Canadian currency and recent data are seen testing the
Bank of Canada's resolve to hold rates unchanged through
mid-2010. [ID:nN095317] [ID:nN0965028]
 After four straight triple-digit gains for the TSX, the
market may have been ripe for a retreat, particularly ahead of
a holiday weekend in Canada.
 The TSX will be closed on Monday for Thanksgiving.
 (Editing by Rob Wilson)