4 Min Read
* TSX falls 0.26 percent to 13,371.70
* Seven index sectors ease, led by energy
* Canada's bright jobs data clouded by U.S. gloom (Updates to close)
TORONTO, July 8 (Reuters) - Toronto's main stock market index fell on Friday as disappointing U.S. jobs data for June hit sentiment, though the decline was tempered by hopes the setback to economic recovery was temporary.
Figures showed U.S. employment growth ground to a halt in June, sending stock market investors scurrying to sidelines to gauge their next moves.
"That definitely took some wind out of the sails of this rally we've had the last couple of weeks. It seems the market is pretty shallow," said Youssef Zohny, portfolio manager at Van Arbor Asset Management.
"Expectations for the U.S. economy over the last month or so have been fairly low so it wasn't too surprising to see weak jobs numbers," he said. "Most investors are taking that in stride and really looking towards the second half of the year to hopefully see some improvement in the U.S. economy."
The U.S. data contrasted sharply with Canadian employment figures for June, which showed 28,400 jobs were created, compared with the 15,000 expected by markets. The Canadian unemployment rate was unchanged at 7.4 percent. [ID:nOAT004829] [ID:nN1E767019]
The index's energy group was the main sector drag, falling 0.81 percent as the price of U.S. crude oil lost more than 2 percent as markets reacted to the bleaker U.S. economic outlook.
Canadian Natural Resources (CNQ.TO), down 3.14 percent at C$40.36, was the biggest overall decliner.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 34.30 points, or 0.26 percent, to close at 13,371.70. Seven of its 10 main groups were lower.
Trading volume was lower than usual, with about 128 million shares changing hands, not much more than on Monday, when U.S. markets were closed for the Independence Day holiday.
Despite the day's drop, the index is up 0.53 percent since last Thursday. The market was shut for Canada Day last Friday. It has risen seven of the last nine sessions and has had a mid-range performance against its U.S. counterparts.
Upcoming earnings season will be a new factor that could influence the market, while Chinese inflation and trade figures for June over the next week may also set the tone for global markets.
"I still feel our market is more influenced more and more by China than what goes on in the U.S. because of the commodity bent," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"As long as the U.S. doesn't go into recession, there's a steady demand for our commodities."
If the Chinese economy has a soft landing, commodity demand will remain healthy and support Canada's resource-laden stock market, he said.
European Goldfields EGU.TO jumped about 11 percent to C$13.65 after Greece granted a long-awaited permit to mine for gold in the country's north, a move set to turn the London-based firm into the European Union's largest primary gold producer. [ID:nLDE7670OL]
Shares of Potash Corp (POT.TO) rose sharply, up 2.56 percent to C$56.89 and the stock was the most influential advancer. It was driven by strong gains in corn prices. Corn futures on the Chicago Board of Trade rose on the back of active export sales of U.S. corn to China and concerns around weather related issues.
($1=$0.96 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)