3 Min Read
* Index rises as high as 12,070 and then retreats
* S&P/TSX composite down 0.12 percent at 11,939.99
* Energy shares lead TSX lower
* Gold-mining shares among index gainers (Recasts, updates prices, adds quotes, details)
By Claire Sibonney
TORONTO, Jan 11 (Reuters) - Toronto's main stock index turned negative on Monday after climbing above 12,000 in early trade for the first time since September 2008, with a reversal in energy shares dragging the market lower.
Oil and gas stocks surged at the open but then retreated rapidly with EnCana Corp (ECA.TO), down 1.7 percent at C$35.37, and Suncor Energy Inc (SU.TO), down 0.78 percent at C$38.39, among the top decliners. The fall came even though oil prices were up 1 percent, hitting a 15-month high near $84 a barrel [O/R], after China reported a surge in crude imports [COM/WRAP].
"I think Wall Street has been a drag. U.S. markets turned lower and commodity markets have also unwound earlier gains so the Canadian market has been unable to build on the strong open," said Fergal Smith, managing market strategist at Action Economics.
"For energy, crude oil made a fresh trend high earlier on just short of $85 a barrel but has since unwound those gains so I think it's consolidating its recent advance."
At 1:15 p.m. (1815 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 13.84 points, or 0.12 percent, at 11,939.99. The index rose as high as 12,070.74 at the start of trade.
Talisman Energy Inc TLM.TO fell 3.2 percent to C$19.93, after reporting it increased its 2010 capital budget by more than 10 percent to C$5.2 billion ($5.06 billion) and is examining the sale of non-core conventional assets in North America. [ID:nLDE60A117]
Potash Corp of Saskatchewan (POT.TO) dropped 1.3 percent to C$126.67 after J.P. Morgan lowered its 2010 earnings estimate for the Canadian potash miner as prices for the crop nutrient have tumbled.
On the plus side, a five-week high in the price of bullion lifted gold-mining issues. Among the top gainers, shares of Barrick Gold Corp (ABX.TO), the world's biggest gold producer, were up 0.6 percent to C$42.99.
Gold prices were up 2 percent to $1,161.50 an ounce, benefiting from weakness in the dollar as traders bet on U.S. interest rates staying low in the immediate future. [GOL/]
Irwin Michael, a portfolio manager at ABC Funds, warned investors not to read too much into the TSX piercing the 12,000 level.
"The market is still very thin, people are still very edgy," he said, referring to many traders' expectations that the market is still due for a correction after its Christmas rally.
$1=$1.03 Canadian Reporting by Claire Sibonney; editing by Peter Galloway