CANADA STOCKS-Golds, energy issues drag TSX lower

Fri Jun 24, 2011 4:59pm EDT
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   * TSX ends down 70.69 points, or 0.5 pct at 12,908.89
 * Nine of 10 main groups finish lower
 * Gold slides despite risk-aversion theme
 (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, June 24 (Reuters) - Toronto's main stock index
ended lower on Friday as gold and energy issues fell and
worries persisted that Greece might not pass the austerity
measures necessary for the country to get more bailout funds.
 Spot gold prices dropped below $1,500 an ounce for the
first time in over a month, weighed down by a U.S. dollar
rally, technical selling and accelerated losses in the equity
and crude oil markets. [GOL/]
  Goldcorp G.TO was the most influential decliner,
dropping nearly 3 percent to C$46.24. The gold-mining subsector
lost 1.7 percent, while the materials group, home to mining
companies, fell 0.9 percent, despite a nearly 1 percent rise
among base-metal issues.
 John Kurgan, senior market strategist at commodity futures
brokerage Lind-Waldock, said many investors were surprised to
see the decline in gold amid the risk aversion theme in the
market on Friday.
 "I think people just have a little bit more faith in the
U.S. dollar and you're getting that risk-off type mentality as
people are coming into the U.S. dollar and coming into U.S.
government debt," he said. "What's getting hurt are the
precious metals, gold specifically, more than silver even."
  The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 70.69 points, or 0.54 percent at
12,908.89, with  nine of its 10 main sectors weaker. Telecoms
rose 0.3 percent.
 The TSX index ended the week 0.9 percent higher.
 The energy sector was down 0.8 percent even as U.S. crude
oil eked out a slight gain on Friday. A surprise announcement
that the International Energy Agency would release 60 million
barrels of government-held stocks had sent oil prices into a 6
percent selloff in the previous session. [O/R]
 Kurgan said investors were still concerned over the price
action in oil on Thursday, despite prices stabilizing.
 "Oil prices may be down here for a while," he added.
 "There just seems to be that effort by these 28 different
countries to keep the oil price down to help the world economic
recovery and so, facing that headwind, why buy oil stocks? You
sold it yesterday, upon reflection today I think you probably
had more liquidation."
 Canadian Natural Resources CNQ.TO was the second heaviest
decliner, sliding 1.6 percent to C$38.26. Smaller oil and gas
producer Niko Resources NKO.TO, down 3.2 percent at C$62.85,
agreed to plead guilty to charges of bribing a Bangladeshi
public official. [ID:nN1E75N02B]
 Concern over commodity prices and the resolution of
Greece's debt crisis trumped better than expected data on U.S.
durable goods orders and German sentiment. [MKTS/GLOB]
 "The situation in Europe is probably the primary thing
that's pervading market sentiment these days," said Michael
Sprung, president at Sprung & Co. Investment Counsel.
 "I'm not sure that's going to have a quick resolution. But
I think that's the first of several worries. Just the idea that
the economy is slowing down," he said, noting volumes were
 On the bright side, copper prices rose 1 percent on
optimism over Chinese demand and positive economic data.
 First Quantum Minerals FM.TO was the most influential
advancer on the index, jumping 3.1 percent to C$127.40.
 Sino-Forest TRE.TO dropped close to 11 percent to C$2.60,
further melting down as questions arose about the lack of
regulatory intervention after the forestry company was accused
of fraud. [ID:nN1E75M0K0]
 Shares of TMX Group edged 0.2 percent lower to C$45.20 amid
continued uncertainty over the success of rival bids to acquire
the stock exchange operator.
 A Canadian offer to buy TMX may have the regulatory edge
over a friendly bid by London Stock Exchange LSE.L.
 ($1=$0.99 Canadian)
 (Additional reporting by Solarina Ho; editing by Rob Wilson)