CANADA STOCKS-Weaker banks, euro zone worries drag TSX lower

Mon Nov 22, 2010 11:14am EST
 
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   * TSX down 58.95 points, or 0.46 pct at C$12,896.38
 * Six of TSX's 10 main groups lower
 * Financials down, fertilizer producers up
 By Solarina Ho
 TORONTO, Nov 22 (Reuters) - Toronto's main stock index
skidded lower on Monday morning as market sentiment remained
cautious over euro zone debt worries and ahead of Canadian bank
earnings.
 The influential financial group was 0.9 percent lower with
Royal Bank of Canada (RY.TO: Quote) off 0.8 percent at C$54.89 and
Toronto-Dominion Bank (TD.TO: Quote) down 0.65 percent at C$74.32.
 "We're still a little bit ahead of the bank earnings, so
given what has gone on elsewhere in the financial services
sector, there's a little bit of anticipation about what might
translate in the banking sector when they release their
results, although they are generally expected to be not too
bad," said Peter Chandler, a senior vice-president and director
at Canaccord Wealth Management.
 Manulife Financial Corp (MFC.TO: Quote) shares were off 4.5
percent at C$14.66 after Citigroup downgraded Canada's largest
insurer to "sell", citing a weak outlook for its U.S. operation
and the risk of dilution from further equity issuance.
[ID:nSGE6AL0OV]
 At 10:35 a.m. (1535 GMT) the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 58.95 points, or
0.46 percent to C$12,896.38.
 Six of the TSX's 10 main groups were negative.
 The market opened lower, but turned positive shortly after
the open, and remained little changed before retreating once
more by midmorning.
 "More often than not, our markets don't take off on a bold
course of direction on a holiday-shortened week and in the
absence of the U.S. market," said Chandler.
 U.S. markets will be closed on Thursday for Thanksgiving,
which typically means a quiet trading day on Friday as well.
 Last week's optimism over a multibillion-euro loan package
for debt-laden Ireland waned as concerns that the debt crisis
might spread to other euro zone countries weighed on market
sentiment.
 Fertilizer companies Agrium Inc (AGU.TO: Quote) and Potash Corp
(POT.TO: Quote) were among the top five movers to the upside,
following news of a takeover in the sector.
 German potash producer K+S SDFG.DE said Monday morning it
would buy Vancouver-based Potash One KCL.TO in a friendly
C$434 million deal, which sent the junior miner's shares up 25
percent to C$4.54.[ID:nN22270264]
 Agrium stock was up 2.7 percent at C$84.17 while Potash
Corp up 0.85 percent to C$144.04.
 ($1=$1.02 Canadian)
(Reporting by Solarina Ho) ((solarina.ho@thomsonreuters.com;+1
416 941 8067; Reuters Messaging:
solarina.ho.thomsonreuters.com@reuters.net))
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