UPDATE 1-Toronto stocks undercut by commodities, Royal Bank
(Adds details, analyst comment)
TORONTO Feb 22 (Reuters) - The Toronto Stock Exchange's main index opened higher but quickly dropped into the red on Friday as commodities prices fell and investors soured on a C$1.36-billion takeover announced by Royal Bank of Canada (RY.TO: Quote).
Spot gold, natural gas and crude oil prices all declined after healthy advances earlier in the week and helped push the S&P/TSX composite index .GSPTSE down. At midmorning it was 79.49 points, or 0.6 percent, lower at 13,430.06. It had risen more than 2 percent in the past three sessions.
"We've been having a rally in commodities and therefore a rally in Toronto, but (credit turmoil) in New York still doesn't look very good so a quiet Friday makes sense," said Douglas Davis, president at Davis-Rea in Toronto.
All but one of the TSX sectors, health care, were down. The materials sector stumbled 1.8 percent and financials tumbled 0.6 percent.
Shares of Royal Bank were punished after it announced an all-stock takeover offer for Phillips, Hager & North Investment Management Ltd, one of Canada's largest and last independent fund managers. For details, see: [nN21506094]
Royal, Canada's biggest bank, was among the biggest weighted decliners, down 51 Canadian cents at C$49.88.
With spot gold down about $4 at $940.50, the TSX gold-mining subsector fell 2.3 percent with Barrick Gold off C$1.44 at C$49.68.
Rogers Communications Inc (RCIb.TO: Quote) shot up at the open but quickly retreated, down 62 Canadian cents at C$38.38, even though it reported a fourth-quarter profit that largely met analysts' expectations. See: [nN22555680]
The relatively small stock of CHC Helicopter FLYa.TO represented the index's biggest weighted gainer, up C$9.40 at C$31.28, after it said a fund managed by First Reserve will buy it for C$3.7 billion.
($1=$1.01 Canadian) (Reporting by Jonathan Spicer; Editing by Peter Galloway)
© Thomson Reuters 2017 All rights reserved.