CANADA STOCKS-TSX lower as banks tumble, gold climbs

Fri Jan 22, 2010 1:10pm EST
 
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* S&P/TSX composite down 0.34 percent at 11,430.49

* Financials help drag TSX to six-week low

* Barrick leads gainers with 2.27 percent rise (Adds details, quotes)

By Claire Sibonney

TORONTO, Jan 22 (Reuters) - Toronto's main stock index took investors on a roller-coaster ride on Friday, as weak financials, reeling from a White House plan to impose tighter restrictions on banks, offset a rebound in the price of gold.

Financial stocks were among the biggest drags on the TSX, with Royal Bank of Canada (RY.TO: Quote), the country's largest bank, down 1.61 percent at C$53.34, leading the decliners. Canadian Imperial Bank of Commerce (CM.TO: Quote) was off 2.02 percent at C$63.40.

U.S. President Barack Obama, looking to advance his agenda after a key Democrat election loss this week, laid out proposals on Thursday to restrict U.S. banks' financial risk-taking, which he blamed for helping cause the financial crisis.

"I think we're just going to go through a period of a bunch of uncertainty as we see all this new policy try to be digested," said Brian Pow, vice-president at Acumen Capital Partners in Calgary, referring to Obama's plan as well as fears that recent bank lending curbs in China could slash demand for commodities and hamper the global recovery.

"From a short-term standpoint we're starting to get to reasonably oversold conditions, so in the absence of something really concrete happening I would expect investors sometime by next week will try to tune out a lot of this rhetoric," said Paul Hand, managing director at RBC Capital Markets.   Continued...