UPDATE 2-Toronto stocks drop on metals, US inflation fears

Fri Dec 14, 2007 4:44pm EST
 
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(Adds official closing numbers, comments, details)

TORONTO Dec 14 (Reuters) - The Toronto Stock Exchange's main index fell modestly on Friday, capping off a losing week as mining stocks continued to slide, while U.S. inflation data dampened expectations of further interest rate cuts.

The S&P/TSX composite index fell 73.02 points, or 0.53 percent, to close at 13,674.23. For the week, the index dropped 1.4 percent.

Metals producers, which have tumbled this week, continued to slide on the back of falling resource prices and concerns that a deeper economic slowdown could reduce demand for materials.

"We're getting pummeled in some of the resources today," said Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp.

The TSX materials subgroup dropped 1.39 percent, the steepest decliner of the seven index subgroups that fell. Three groups ended the session higher.

Kinross Gold (K.TO: Quote), Canada's No. 3 gold miner, fell 69 Canadian cents, or 3.8 percent, to C$17.50, while copper and zinc miner HudBay Minerals (HBM.TO: Quote) slid 67 Canadian cents, or 3.2 percent, to C$20.26.

The TSX financials group, which makes up about one-third of the index, eased 0.66 percent as stronger-than-expected U.S. inflation data fueled concerns that the U.S. Federal Reserve may stop cutting interest rates earlier than expected.

Canadian Imperial Bank of Commerce (CM.TO: Quote), one of several banks to reveal writedowns from exposure to the subprime mortgage market, fell C$2.99, or 3.9 percent, to C$73.60, while Bank of Montreal dropped C$1.62, or 2.7 percent, to C$58.11 ($1=$1.02 Canadian) (Reporting by Cameron French; Editing by Peter Galloway)