CANADA STOCKS-TSX falls on broad declines despite oil price surge

Thu Mar 26, 2015 11:18am EDT
 
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TORONTO, March 26 (Reuters) - Canada's main stock index slipped on Thursday, as limited resource stock gains on the back of Middle Eastern violence were offset by broad pessimism about economic growth that affected banks, insurers, railways and others.

Saudi Arabia and its allies launched airstrikes on rebels in Yemen that spooked investors, boosting commodity markets but dampening enthusiasm for equities globally.

"This is one of those geopolitical events that are pretty hard to read," said Michael Sprung, president at Sprung Investment Management Inc. "From my point of view I would not count on this being a turning point for the oil market yet."

After an early rise, the Toronto Stock Exchange's S&P/TSX composite index reversed course and by late morning was down 54.64 points, or 0.37 percent, at 14,874.73.

With recent U.S. economic data introducing doubts about the Federal Reserve's interest rate trajectory, investors are trimming bullish holdings in Canadian banks, Sprung said.

Toronto-Dominion Bank slipped 0.4 percent to C$53.70, while Canadian Imperial Bank of Commerce gave up 1 percent to C$91.11. Insurer Manulife Financial Corp lost 1.1 percent to C$21.41, and Canadian Pacific Railway was down 0.8 percent at C$228.23.

Pipeline company TransCanada Corp fell 1.8 percent to C$54.89, while fellow pipeline operator Enbridge lost 1.3 percent to C$61.38.

The biggest Canadian beneficiaries of the oil spurt were some of its largest operators, which Sprung said are well placed to benefit from likely consolidation as historically low oil prices hurts smaller players.

Canadian Natural Resources gained 1.7 percent to C$39.12 and Suncor Energy Inc added 1.2 percent to C$36.60.

(Reporting by Alastair Sharp Editing by W Simon)