June 15, 2009 / 9:07 PM / 8 years ago

CANADA STOCKS-TSX gives up recent gains as commodities sag

3 Min Read

* TSX falls 250.18 points to 10,394.78

* Slide follows four weeks of gains

* Energy shares fall 3.4 pct, lead selloff (Adds details, comments)

By Frank Pingue

TORONTO, June 15 (Reuters) - Toronto's main stock index closed lower on Monday as falling commodity prices sent the resource-heavy index into a broad-based retreat that nearly wiped out all the gains made over the past two weeks.

The weighty energy sector posted the biggest selloff, with a 3.4 percent drop, as oil prices fell almost 2 percent after nearing an eight-month high last week.

Shares of Suncor Energy (SU.TO) finished down 4 percent at C$37.47, while Canadian Natural Resources (CNQ.TO) shares followed with a slide of 3.6 percent to C$62.40.

The lower start to the week follows four straight weekly winning sessions for the TSX composite and erased most of its 2.6 percent gain logged over the past two weeks.

Prices for oil and gold, both key Canadian exports, were dealt a blow by a U.S. dollar that rallied after Russia expressed confidence in the greenback as the world's reserve currency. [ID:nN15224944]

"Obviously, that strength in the U.S. dollar means all your commodities measured in U.S. dollars are weaker and that just creates selling on its own," said Sal Masionis, a stockbroker at Brant Securities.

"But the market was ready for some correction because it's had a huge move up from its bottom, so we just got into a bit of a correction phase here."

Last week the TSX was 43 percent above the five-year low of 7,479.96 reached in March. But after a pair of lower closes it is now up 39 percent from that point.

The S&P/TSX composite index .GSPTSE ended down 250.18 points, or 2.35 percent, at 10,394.18. All 10 of its main sectors ended lower.

The materials group, is home to gold-mining stocks, tumbled 2.75 percent. Its slide was blamed on the firmer U.S. dollar as commodities priced in U.S. dollars become more expensive for holders of other currencies.

Shares of Barrick Gold Corp (ABX.TO) slid 1.8 percent to C$37.33, while Goldcorp (G.TO) shed 1.9 percent to C$38.32.

Some experts said the news that the opposition Liberals were threatening to topple the minority Conservative government and force a new election did not factor heavily into the TSX's latest selloff but the political uncertainty didn't do the market any favors. [ID:nN15437772]

"There is talk of a potential election ... people have to be concentrating on the economy and not the politics and all this other stuff," said Masionis.

$1=$1.13 Canadian

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