CANADA STOCKS-TSX touches one-week low as bullion selloff hits gold shares

Thu Sep 12, 2013 10:51am EDT
 
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* TSX falls 84.21 points, or 0.66 percent, to 12,741.21
    * Eight of 10 main index sectors decline.
    * Gold-mining shares shed nearly 4 percent
    * Goldcorp, Barrick have biggest impact on market

    By John Tilak
    TORONTO, Sept 12 (Reuters) - Canada's main stock index
dropped to a one-week low on Thursday as a slump in bullion
prices hit shares of gold miners and concerns about the U.S.
Federal Reserve's monetary policy direction weighed on broader
sentiment.
    The market braced for a possible move by the Fed to begin
unwinding its stimulus program. Investors expect the U.S.
central bank to announce its intentions at a policy meeting next
week.
    Investors also followed developments about Syria, with
Russia and the United States trying to hash out a deal to disarm
Syria of its chemical weapons and prevent military action.
 
    Bullion, which had gained sharply in recent weeks on news of
escalating tensions in Syria as it was seen a safe-haven asset,
shed nearly 3 percent on Thursday and hit a four-week low. The
price of silver tumbled 4.3 percent.
    "The factors that had inspired the big rally in gold and
silver a couple of weeks ago are unraveling," said Colin
Cieszynski, senior market analyst at CMC Markets Canada.
    "Traders are still confused about what's going to go on,
particularly with tapering and the situation in Syria," he
added. "People aren't completely sure about which way to go."
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 84.21 points, or 0.66 percent, at 12,741.21,
after reaching 12,730.67, its lowest level since September 4. 
    Eight of the 10 main sectors on the index were in the red.
    The materials sector, which includes mining stocks, declined
2.8 percent. Gold producers lost almost 4 percent.
    Goldcorp Inc fell 5.2 percent to C$27.12, and Barrick
Gold Corp slipped 4.4 percent to C$18.35. The two
stocks had the biggest negative influence on the market.
    Silver Wheaton Corp declined 3.9 percent to
C$25.15.
    Financials, the index's most heavily weighted sector, gave
back 0.5 percent. Royal Bank of Canada stumbled 0.5
percent to C$65.84.
    But higher oil prices pushed up shares of energy companies.
Suncor Energy Inc added 0.6 percent to C$36.89, and
Canadian Natural Resources Ltd gained 0.7 percent to
C$32.98.