June 12, 2008 / 3:34 PM / 9 years ago

UPDATE 1-Toronto stocks lower as commodity prices soften

3 Min Read

(Adds details, comment)

*Soft commodities weigh on resource stocks

*Nortel rises on bullish business plans

*Banks follow world stocks higher

*Transat AT, Canaccord Capital rise on results

By Jonathan Spicer

TORONTO, June 12 (Reuters) - The Toronto Stock Exchange's main index dropped on Thursday morning as oil and gold prices headed lower, hitting Canadian resource shares.

The TSX energy and gold groups fell 1.7 percent and 2.5 percent respectively.

Losses on the resource-heavy index would have been worse if not for strength in Nortel Networks NT.TO and big banks, which rose in tandem with most world equity markets.

Fred Ketchen, director of equity trading at ScotiaMcLeod, noted that the majority of Canadian sectors were holding up fairly well, with some bargain-hunting in the recently-depressed financial sector.

The S&P/TSX composite index .GSPTSE was down 108.72 points, or 0.7 percent, at 14,607.80. It has dropped the last four sessions.

Profit-taking knocked oil futures down more than 2.5 percent to below $132 a barrel. Spot gold followed suit, down more than $15 an ounce to below $863 an ounce as the U.S. dollar strengthened.

In response, Suncor Energy (SU.TO) declined C$2.04 to C$66.72, while Barrick Gold (ABX.TO), the world's No. 1 producer, slipped C$1.07 to C$39.43.

Elsewhere in the oil patch, Precision Drilling Trust PD_u.TO climbed 9 Canadian cents to C$27.65 after fellow driller Grey Wolf Inc GW.A of the United States rejected Precision's $1.6-billion takeover offer. For details, see: [nN12336850]

Nortel led the updraft, adding C$1.25 to C$10.67 as the telecommunications equipment-maker continued to benefit from the optimistic business plans it presented on Wednesday. See: [nN12421659]

The small TSX tech sector jumped 3.2 percent. Financials, meanwhile, rose 0.4 percent with Royal Bank of Canada (RY.TO) up 44 Canadian cents at C$48.74.

Investment bank Canaccord Capital CCI.TO said it swung to a loss in the fourth quarter, but its shares climbed 12 Canadian cents to C$9.00. See: [nN12359065]

Elsewhere, Transat AT TRZb.TO jumped C$2.62 to C$21.03 after the holiday travel firm reported a profit drop related to its ABCP holdings, and said bookings are up for the summer. For details, see: [nN12300980]

Globally, stocks were mostly higher after Belgium's InBev INTB.BR bid $46 billion for U.S. rival brewer Anheuser-Busch (BUD.N), and after data showed U.S. retail sales rose more than expected in May. For details, see: [nL12619037] and [nN11255522] ($1=$1.02 Canadian) (Reporting by Jonathan Spicer; Editing by Scott Anderson)

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