Weak resources take gains out of Toronto stocks

Wed May 14, 2008 4:43pm EDT
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TORONTO (Reuters) - The Toronto Stock Exchange's main index gave up nearly all its gains on Wednesday, as weak resources undermined a rally by financial issues after Royal Bank of Canada (RY.TO: Quote) said it would take a smaller second-quarter writedown than had been expected.

Miners were among the companies that led the retreat, including Inmet Mining IMN.TO, as the start date of its Las Cruces copper project was put in doubt after Spain's water authority suspended a water permit. Inmet gave up C$9.49, or 12.3 percent, at C$67.50.

The financial sector pushed higher, with shares of Royal up C$1.23, or 2.5 percent, at C$49.85 after Canada's largest bank said it will see a pretax writedown of C$855 million amid liquidity pressures on its assets.

"There's so many rumors floating around on what (banks') exposures are," said Sal Masionis, stockbroker at Brant Securities. "So obviously it's quite nice to have a rally."

The S&P/TSX composite index .GSPTSE closed up 9.61 points, or 0.07 percent, at 14,626.31 with half of the 10 main sectors higher.

The banking group, which has been battered by global losses and writedowns stemming from the credit crunch and deteriorating U.S. housing market, rose 1 percent.

The sector had earlier helped the benchmark jump to a record high of 14,737.18, surpassing the 14,695.75 mark that was reached on Monday.

Canadian Imperial Bank of Commerce CM.TO added 76 Canadian cents, or 1 percent, to C$74.01, and Toronto-Dominion Bank TD.TO rose 57 Canadian cents, or 0.9 percent, to C$67.57.

Gold producers fell 1.7 percent, while the price of bullion slid slightly. Agnico-Eagle Mines (AEM.TO: Quote) was down C$1.50, or 2.3 percent, at C$63.91, while the broader materials sector was off 0.9 percent.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>