CANADA STOCKS-Bottom feeders save TSX from steeper selloff

Tue Mar 15, 2011 4:53pm EDT
 
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   * TSX ends down 72.23 points, or 0.5 pct, at 13,546.96
 * Hits low of 13,237.93, weakest level since Jan. 25
 * Energy sector, base metals group rebound
 * Cameco Corp turns positive after steep slide
 (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, March 15 (Reuters) - Toronto's main stock index
recouped most of its losses on Tuesday as investors scooped up
beaten down shares following a major selloff earlier in the day
on fears of a nuclear catastrophe in Japan.
 Worries about a radiation leak in Japan after an explosion
at a quake-crippled nuclear power plant hammered world stock
markets and fueled a broad selloff in commodities such as oil,
base metals and even safe-haven golds as investors raced to
liquid assets like cash. [MKTS/GLOB] [ID:nL3E7EF3II]
 Toronto's energy sector made the strongest recovery,
however, erasing most of the day's losses to post a gain of 0.1
percent, despite U.S. crude ending nearly 4 percent lower.
Stronger natural gas prices helped somewhat. [O/R] [NGA/]
 Suncor Energy (SU.TO: Quote) was off 0.45 percent at C$41.90, but
Canadian Natural Resources (CNQ.TO: Quote) rallied 2.1 percent to
C$46.00.
 "It's been a wild ride to say the least ... we've seen a
bit of panic selling this morning and I think the street maybe
was getting short, and some value investors are coming back in
the market," said Francis Campeau, broker at MF Global Canada
in Montreal.
 "It's the first real dip we've seen since last September
... so some bottom pickers have come out and been buying it all
day."
 Base-metal miners also finished higher, up 1.5 percent,
despite the price of copper plunging to a three-month low. Teck
Resources (TCKb.TO: Quote) surged 4.3 percent to C$51.71.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 72.23 points, or 0.53 percent, at
13,546.96. Earlier, it fell as low as 13,237.93, its weakest
level since Jan. 25, and was down almost 8 percent from
multi-year highs hit last week.
 The Toronto index has closed below its 50-day moving
average around 13,700 for the past three days, paving the way
for a retest of the December low around 13,100, said Fergal
Smith, managing market strategist at Action Economics.
 MF Global's Campeau said that after testing support near
January's low around 13,200, the next major level to watch will
be the 200-day moving average around 12,600.
 Uranium producers remained among the heaviest decliners on
Tuesday, as were insurers and gold miners.
 Uranium One UUU.TO was off almost 14 percent at C$3.73,
but top Canadian producer Cameco Corp (CCO.TO: Quote) made a stunning
comeback to close up 1.2 percent at C$32.07 after falling more
than 11 percent earlier in the day.
 "What happens is there's a lot of hedge funds and people
who get involved ... they drive it down and then when it gets
down, they buy back in," said John Kinsey, portfolio manager at
Caldwell Securities.
 "Or you get people that come in, sort of bottom fishers or
people who feel 'well now we've got some value'," he added,
noting that countries like Japan, China and India are still
going to build nuclear power plants and demand for uranium will
remain.
 Barrick Gold Corp (ABX.TO: Quote) shed 2.4 percent to C$48.45, and
Manulife Financial (MFC.TO: Quote), which has extensive operations in
Japan, dropped 4.3 percent to C$16.02, deepening a three-day
slide as the worsening crisis fueled fears that a prolonged
slump on equity markets would hurt the insurer's profits.
[ID:nN15253225]
 Despite the Japanese tragedy -- with more than 10,000
people feared killed by the earthquake and tsunami -- Kinsey
said some investors will see the disaster as an opportunity in
anticipation of rebuilding efforts.
 ($1=$0.98 Canadian)
 (Reporting by Claire Sibonney; editing by Rob Wilson)