July 14, 2011 / 9:10 PM / 6 years ago

CANADA STOCKS-TSX falls as Fed backs off stimulus talk

 * TSX drops 0.54 percent to 13,252.92
 * Seven index sectors fall, resources drop the most
 * Bernanke says Fed not ready to act yet  (Updates to close)
 TORONTO, July 14 (Reuters) - Toronto’s main stock index closed lower on Thursday with resource shares taking the biggest hit after U.S. Federal Reserve Chairman Ben Bernanke backed away from signaling that he was set to ease monetary policy.
 Investors took cheer on Wednesday from Bernanke’s suggestion that the Fed was ready to inject more money into the economy if the situation was dire enough to warrant it. He stood by that assertion on Thursday, but added that the time had not yet come to do so, which deflated market hopes. [ID:nN1E76D0IG]
 “The market basically took it negatively,” said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets. Mokhtari added that the U.S. debt ceiling impasse and the ongoing eurozone debt crisis were also dragging on sentiment.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 72.02 points, or 0.54 percent, at 13,252.92. Seven of its 10 main sectors fell.
 Chief decliners were in the influential energy and materials groups, down 0.56 percent, and 0.89 percent, respectively. Commodity prices turned lower after Bernanke’s comments.
 Suncor Energy (SU.TO) fell 1.23 percent to C$37.60, while Barrick Gold (ABX.TO) dropped 1.3 percent to C$46.01. Teck Resources TCKb.TO fell 2.07 percent to C$48.70, and Talisman Energy TLM.TO shed 2.11 percent to C$18.05.
 But Nexen Inc NXY.TO bucked the trend, rising 3.4 percent to C$21.89 after it reported estimate-topping earnings. [ID:nL3E7IE1U9]
 Mokhtari said a pullback now should not be a surprise after the Toronto market’s strong run through the end of June.
 “Volume readings are not that significant on down days in Canada or the U.S. I would say it’s more of profit-taking, more of what you would call backing and filling. For the time being I wouldn’t read too much into it.”
 ($1=$0.96 Canadian)  (Reporting by Ka Yan Ng; editing by Peter Galloway)                                        

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