UPDATE 1-Toronto stocks pare losses but gold miners fall

Wed Feb 20, 2008 10:23am EST
 
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(Adds details, analyst comment)

TORONTO Feb 20 (Reuters) - The Toronto Stock Exchange's main index was lower on Wednesday morning, led down by mining shares as falling commodity prices encouraged investors to lock in profits.

The index handed back about a quarter of the previous day's 220-point gain, with materials issues and gold producers such as Barrick Gold (ABX.TO: Quote) taking the biggest hits.

The S&P/TSX composite index .GSPTSE was off earlier lows by midmorning, down 53.12 points, or 0.4 percent, at 13,394.62. It fell more than 100 points immediately after trading began.

Spot gold, which was red hot in the previous session, was down about $7 an ounce, dragging the TSX gold-mining subsector down 0.7 percent. Barrick, the world's No. 1 producer, fell 73 Canadian cents to C$50.25.

U.S. crude oil, which also helped boost the TSX the day before, retreated to below $99 a barrel -- but the energy sector was mostly flat.

"The oil prices are off but natural gas is still remarkably strong, and I think that's the story for the energy sector," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Canadian Natural Resources (CNQ.TO: Quote) was the biggest weighted gainer, up 81 Canadian cents at C$68.86.

Financial stocks, which represent the biggest TSX sector, declined 0.4 percent.   Continued...