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By Leah Schnurr
TORONTO, March 12 (Reuters) - The Toronto Stock Exchange’s main index ended lower on Wednesday after a choppy session, weighed down by weaker energy stocks and persistent investor uncertainty about the state of credit markets.
Profit-taking among resource shares as well as concern over whether the price of oil will be able to maintain its recent dizzying heights helped pull the index to the downside.
The energy sector slid 1.2 percent even while the price oil, usually a key underlying commodity for the TSX, touched a new high of $110.20 a barrel, its sixth day of record highs.
Oil rallied to close higher after falling early in the session on U.S. government inventory data that showed a sharp build in crude stocks last week, as well as another gain in gasoline levels.
“I think the reason why the sector is down is probably because of those increased inventories that we heard about this morning,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
“That may be a one-day reason because if you really believe that ... the U.S. dollar is going to continue to weaken and oil prices are going to move higher, we’ll probably see that occur tomorrow.”
The S&P/TSX composite index .GSPTSE closed down 47.18 points, or 0.35 percent, at 13,297.35 with four of its 10 main sectors lower. The index sank more than 100 points early in the day and then briefly climbed back into positive territory, making for see-saw action.
But the benchmark index was able to hold on to most of the hefty 340-point surge seen on Tuesday after a move by central banks to ease problems in the credit markets, including a $200 billion injection by the U.S. Federal Reserve.
Skepticism set in on Wednesday over whether the move to boost liquidity would be enough to stave off a U.S. recession as analysts said the prevailing attitude was that it was a short-term fix for a bigger problem.
“It’s just one of those cases where I think investors don’t know what to do, how to gauge the effects of the Fed announcement yesterday,” Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc said of Wednesday’s bumpy session.
“My feeling is it’s short-term (and) we need a long-term solution, which we haven’t got yet,” said Mastracci. “Once we get a long-term solution, I think investors will be more comfortable in seeing their way through this.”
The resource-laden materials sector also helped pull the index lower, falling 0.3 percent while its smaller subindex of gold producers was off 0.5 percent. Potash Corp of Saskatchewan (POT.TO) was down C$1.59, or 1 percent, at C$153.41.
On the upside, grain company Viterra VT.TO added C$1.21, or 9.8 percent, to C$13.16 after it posted quarterly profit amid strong sales and higher grain handling margins.
Also on the earnings front, shares of Transat AT Inc TRZb.TO tumbled C$2.11, or 8.1 percent, to C$23.96 after the holiday travel company reported a surprise loss, hurt by a writedown related to its holdings in asset-backed commercial paper.
Market volume was 364 million shares worth C$6.7 billion. Decliners outpaced advancers 786 to 777. The blue chip S&P/TSX 60 index .TSE60 closed down 4.65 points, or 0.59 percent, at 781.47.
On Wall Street, stocks ended lower as investors were feeling less optimistic over the initiative to bolster credit markets. The Dow Jones industrial average .DJI was down 46.57 points, or 0.38 percent, at 12,110.24, while the Nasdaq composite index .IXIC slipped 11.89 points, or 0.53 percent, to 2,243.87.
$1=$0.99 Canadian Reporting by Leah Schnurr; editing by Rob Wilson