Toronto stocks slip amid profit-taking

Wed Mar 12, 2008 4:48pm EDT
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TORONTO (Reuters) - The Toronto Stock Exchange's main index ended lower on Wednesday after a choppy session, weighed down by weaker energy stocks and persistent investor uncertainty about the state of credit markets.

Profit-taking among resource shares as well as concern over whether the price of oil will be able to maintain its recent dizzying heights helped pull the index to the downside.

The energy sector slid 1.2 percent even while the price oil, usually a key underlying commodity for the TSX, touched a new high of $110.20 a barrel, its sixth day of record highs.

Suncor Energy (SU.TO: Quote) was down C$1.83, or 1.7 percent, at C$105.13, while Canadian Natural Resources (CNQ.TO: Quote) lost C$1.58, or 2.1 percent, to C$72.14.

But the benchmark index was able to hold onto most of the hefty 340-point surge seen on Tuesday after a move by central banks to ease problems in the credit markets, including a $200 billion injection by the U.S. Federal Reserve.

Skepticism set in on Wednesday over whether the move to boost liquidity would be enough to stave off a U.S. recession as analysts said the prevailing attitude was that it was a short-term fix for a bigger problem.

"It's just one of those cases where I think investors don't know what to do, how to gauge the effects of the Fed announcement yesterday," Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc said of Wednesday's bumpy session.

"My feeling is it's short-term (and) we need a long-term solution, which we haven't got yet," said Mastracci. "Once we get a long-term solution, I think investors will be more comfortable in seeing their way through this."

The S&P/TSX composite index .GSPTSE closed down 47.18 points, or 0.35 percent, at 13,297.35 with four of its 10 main sectors lower. The index sank more than 100 points early in the day and then briefly climbed back into positive territory, making for see-saw action.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. The Toronto Stock Exchange's main index was expected to fall on Monday, depressed by a drop in commodity prices and news that energy producers in Canada will be forced to capture much of their carbon emissions. REUTERS/Mark Blinch</p>