CANADA STOCKS-TSX slips as sovereign debt fears mount

Mon Jul 18, 2011 11:01am EDT
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 *TSX down 42.22 points at 13,257.32.
 *Seven of 10 sectors weaker, golds rally
 (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, July 18 (Reuters) - Toronto's main stock market
index retreated on Monday morning as sovereign debt fears
triggered an exodus from riskier assets, though a record high
for safe-haven gold tempered the decline.
 European bank stress test results last Friday did little to
calm fears that the euro zone crisis is getting worse, weighing
on U.S. equities and other riskier assets.
 Concerns about the impact of the debt crises on global
growth pushed down the price of oil, hitting Canadian oil and
gas producers. [MKTS/GLOB] [O/R]
 Energy shares slipped 0.5 percent and financials dropped
1.1 percent as investors focused Thursday's emergency meeting
of EU leaders to discuss a second bailout package for Greece.
 In the United States, investors are nervous about the
stalemate in Washington as the Aug. 2 deadline looms for an
increase in the statutory $14.3 trillion borrowing limit.
 Royal Bank of Canada RY.TO led the decliners, falling 1.4
percent to C$52.29, followed by Bank of Nova Scotia BNS.TO,
down 1.4 percent at C$56.26 and Canadian Natural Resources
CNQ.TO, off 1.1 percent at C$39.32.
 "With the U.S. markets down so much it's going to be hard
for us to make headway. The one bright spot has been gold,"
said John Kinsey, portfolio manager at Caldwell Securities,
though he noted that the gold mining shares are still lagging
the price of the commodity.
 Gold prices rallied above $1,600 an ounce in Europe as
spooked investors bought the metal as a haven from risk.
 At 10:37 a.m. (1437 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE  was down 42.22 points, or
0.3 percent, at 13,257.32. Seven of the 10 sectors were weaker.
Materials were 1 percent higher, driven by gold miners, up
almost 2 percent.
  Goldcorp Inc G.TO was the most influential climber, up
2.3 percent at C$52.76, while Barrick Gold ABX.TO was close
behind, advancing almost 2 at C$47.01.
  (Reporting by Claire Sibonney; Editing by Frank McGurty)