CANADA STOCKS-TSX falls on bank, resource issues in quiet trade

Mon Jan 17, 2011 5:28pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * TSX falls 0.18 percent to close at 13,440.11
 * Seven of 10 groups down, including financials, resources
 * Canada toughens mortgage rules, bank stocks pressured
 (Adds details)
 TORONTO, Jan 17 (Reuters) - Toronto's main stock index
slipped on Monday, weighed down by mostly soft resource and
financial issues in light trading volume.
 Financials were mostly weaker, falling 0.17 percent, as
investors assessed news that Ottawa will tighten mortgage rules
for the second time in less than a year, partly to curb rising
household debt levels.
 For Canadian banks, the new rules may add to a slowing of
personal loan growth, but analysts said a slowdown had already
been expected due to expectations of higher interest rates,
more prudent lending practices on the part of banks, and the
possibility of tighter mortgage standards. [ID:nN17274705]
 "Over half the loans written by the banks are real
estate-secured loans. This will shrink the market a little bit
and it will also perhaps cause the banks not to be able to lend
on the leverage that they were before. It's going to impact
their earnings to some extent," said Michael Sprung, president
at Sprung & Co. Investment Counsel.
 By session's end, the financials had cut losses, with Bank
of Montreal BMO.TO down 0.13 percent at C$59.45,
Toronto-Dominion Bank TD.TO down 0.09 percent at C$76.10, and
Bank of Nova Scotia BNS.TO off 0.25 percent at C$56.69.
 Bucking the trend, Royal Bank of Canada RY.TO rose 0.15
percent to C$53.97, while mortgage lender Home Capital Group
HCG.TO gained 1.11 percent to C$53.90.
 Overall, the Toronto Stock Exchange's S&P/TSX composite
index .GSPTSE fell 23.95 points, or 0.18 percent, to close at
13,440.11. Seven of the index's 10 main sectors declined as
thin trading conditions prevailed with U.S. markets closed for
the Martin Luther King holiday.
 The index was flat for most of the session.
 The materials sector finished down 0.24 percent, but its
constituents were mixed, with strong golds offset by sinking
base metals and fertilizer issues. The energy group was also a
weak link, down 0.41 percent.
 Key decliners included Potash Corp of Saskatchewan
POT.TO, down 0.89 percent at C$169.09, while Imperial Oil
IMO.TO lost 0.91 percent to C$42.26.
 Gold-mining issues, however, rose after last week's selloff
that was sparked in part by the price of bullion retreating by
more than 4 percent since the start of the year. [GOL/]
 Barrick Gold Corp ABX.TO, up 0.62 percent at C$46.88, and
Goldcorp G.TO, up 0.75 percent at C$40.47, helped keep the
index's overall decline in check.
 Technology stocks were 0.53 percent higher, led by Research
In Motion RIM.TO, which advanced 1.17 percent to C$64.93,
extending last week's gains.
 ($1=$0.99 Canadian)
 (Reporting by Ka Yan Ng; editing by Rob Wilson)