CANADA STOCKS-TSX tumbles to 2-month low, oil shares rattled

Wed Oct 28, 2009 5:04pm EDT
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 * TSX falls 248.21 points to 10,805.33
 * Fourth straight lower close for TSX
 * Energy companies and gold miners lead pullback
 (Adds details and comments)
 By Frank Pingue
 TORONTO, Oct 28 (Reuters) - Toronto's main stock index
skidded to its lowest close in nearly two months on Wednesday
as a drop in oil prices shook EnCana Corp ECA.TO and other
energy companies and as surprisingly bleak U.S. home sales data
raised doubts about economic recovery.
 Shares of EnCana ended down 4 percent at C$59.74, Suncor
Energy SU.TO shed 3.2 percent to C$35.82, and Canadian
Natural Resources CNQ.TO fell 3.6 percent to C$70.50.
 The companies were the three biggest drags on the TSX
 The latest slide in the heavily weighted energy sector came
as oil prices fell more than 2 percent on worries about demand
in the United States, the world's largest fuel consumer. [O/R]
 Also in the United States, sales of newly built
single-family homes unexpectedly fell 3.6 percent last month,
stirring fears that economic recovery may be falling flat.
 Shares of gold miners were also among the key drags on the
TSX as the price of bullion hit a three-week low in the face of
a stronger U.S. dollar, which makes bullion more expensive for
non-U.S. dollar holders.
 Kinross Gold K.TO shares fell 4.6 percent to C$19.36,
while Barrick Gold ABX.TO dropped 3.5 percent to C$37.04.
 The S&P/TSX composite index .GSPTSE fell 248.21 points,
or 2.25 percent, to 10,805.33. It was the TSX's lowest level
since Sept. 3, and its fourth straight lower close.
 The index, however, is still up 44 percent from the
five-year low in hit in March.
 "We're seeing significant profit-taking in some of the
stocks that have performed extremely well from the March lows,"
said Elvis Picardo, analyst and strategist at Global Securities
in Vancouver.
 "One reason for that profit-taking is there seems to be
increasing nervousness about what the global economy will do
once the economic stimulus starts to get taken out."
 Other stocks on the move included Open Text Corp OTC.TO,
which fell 5.8 percent to C$40.03 after the business software
maker posted an 88 percent drop in profit. [ID:nN27263987]
 Shares of Nexen Inc NXY.TO dropped 2.5 percent to C$23.40
after Canada's fourth-largest independent oil explorer said its
third-quarter profit fell 86 percent. [ID:nBNG449399]
 Activity in equity markets could be volatile over the next
two sessions as investors adjust their portfolios before
month's end. And while weakness in equities may extend beyond
this week, some experts still anticipate more gains in 2009.
 "But you might see these declines continue for a while yet
and that is simply because we had been pushed up to levels that
were unsustainably high in my opinion," Picardo said.
 "Historically we've always finished the year on a strong
note and I don't think this year is going to be an exception."
 ($1=$1.08 Canadian)
 (Editing by Peter Galloway)