4 Min Read
*TSX down 41.18 points at 11,866.36
*Energy, banks lead way lower
*Magna shares drop after OSC challenge (Adds details, quote)
By Jennifer Kwan
TORONTO, June 16 (Reuters) - Toronto's main stock index was lower on Wednesday morning as energy issues fell on weaker oil prices and fresh concerns emerged about Spain's fiscal problems.
Big oil and gas names on the downside included EnCana Corp (ECA.TO), down 1.2 percent at C$34.99, and Talisman Energy TLM.TO, down 1.3 percent at C$18.03 as the price of oil fell below $77 a barrel. [O/R].
The index's financial sector was also lower with Royal Bank of Canada (RY.TO), the country's biggest lender, down 0.2 percent at C$54.60, and Toronto-Dominion Bank (TD.TO) declining 0.8 percent to C$72.87.
At 10:39 a.m. (1439 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 41.18 points, or 0.35 percent, at 11,866.36, with eight of its 10 main groups lower. On Tuesday it rose 2 percent.
Given that rise in the previous session, it's normal to "expect a little give back," said Fred Ketchen, director of equity trading at ScotiaMcLeod.
Shortly after the open, the index briefly stepped into positive territory, supported by modest gains in banks.
"If you're looking for something where you know you're going to have a consistent dividend with a fairly attractive yield, you've got modest growth, (the banks are) extremely well managed, I can understand why that sector is continuing to show some degree of popularity," Ketchen said.
Gold held near around $1,232 an ounce, with demand for the metal as a safe haven holding firm as widening spreads between Spanish and German government bond yields pointed to concern over European debt levels. [GOL/]
Market worries about Spain's debt position continued to simmer, with the premium that investors were demanding to hold Spanish debt compared with benchmark German bonds rising to a euro record high of 223 basis points. ES10YT=TWEB DE10YT=TWEB. [ID:nLDE65F0GD]
The jitters came even though the European Union and the International Monetary Fund denied on Wednesday a report that they and the U.S. Treasury were drawing up a safety net for Spain including a credit line of up to 250 billion euros.
In individual company news, Magna International's MGa.TO controversial plan to eliminate its dual class share structure ran into an additional hurdle with the Ontario Securities Commission challenging the proposal. Magna's shares were 3.2 percent lower at C$71.02. [ID:nN16135020]
Canada's Bombardier Inc (BBDb.TO), which was up 1.2 percent at C$4.89, said it would start delivery of double-deck trains to Swiss Federal Railways (SBB) in 2012 under a 1.8 billion Swiss franc ($1.6 billion) contract. [ID:nSGE65F0CD]
$1=$1.03 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway