CANADA STOCKS-TSX ends lower as oil deflates early rally

Tue Jun 16, 2009 5:01pm EDT
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* TSX falls 87.38 points to 10,307.40

* Erases early 166-point surge

* Energy shares lead turnaround (Adds details and comments)

By Frank Pingue

TORONTO, June 16 (Reuters) - Toronto's main stock index closed lower on Tuesday despite a solid start to the day as investors continued to pocket gains from the index's remarkable 40 percent rally from the five-year low it hit in March.

Energy companies led the TSX index's selloff, its third straight, as concerns about the strength of the economic recovery sent oil prices further from the near eight-month high above $73 a barrel they reached last week. [ID:nN16279408]

Suncor Energy (SU.TO: Quote) shares slid 3.4 percent to C$36.18, while EnCana Corp (ECA.TO: Quote), North America's largest natural gas producer, dropped 2.2 percent to C$58.99. Both companies were among the biggest drags on the TSX index.

Eight of the TSX index's 10 sectors ended lower, with the energy group's 2.4 percent fall the biggest.

The TSX rallied at the open, rising 166 points, or 1.6 percent, before steadily relinquishing the gains and sputtering to its lowest close since June 3.   Continued...