May 21, 2008 / 1:46 AM / 9 years ago

Toronto stocks battered by profit-taking

4 Min Read

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007.Mark Blinch</p>

TORONTO (Reuters) - The Toronto Stock Exchange's main index ended a volatile session more than 250 points lower on Wednesday, as profit-taking hit energy issues, sparking a broad late-day selloff following recent record highs.

After pushing higher earlier in the day, oil and gas companies reversed direction, even though crude prices hit a record over $133 a barrel on an unexpected drop in U.S. stockpiles.

The energy group, whose heavy weighting has been largely responsible for the index's recent run-up, lost 1.5 percent.

"It looks like there's some profit-taking starting in the oils," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd. in Calgary.

"Some of these oils that were really running hard are coming off from the morning," he said

"When you get that kind of rise in commodities -- fast, furious, quick -- everyone wants to take some (money) off the table."

Canadian Natural Resources (CNQ.TO) was down C$1.43, or 1.4 percent, at C$103.93, while Suncor Energy (SU.TO) slipped C$1.39, or 1.9 percent, to C$70.98.

Talisman Energy TLM.TO was down C$1.25, or 5 percent, at C$23.65 a day after it unveiled a significant revamp of its global oil and gas business, as well as an asset sale.

The S&P/TSX composite index .GSPTSE closed down 256.97 points, or 1.71 percent, at 14,790.37 with all but one of its 10 main sectors lower. It was the largest one-day drop since the end of April.

Since last week, the benchmark has been roaring to record highs, surging above 15,000 on Tuesday for the first time.

Fertilizer company Potash Corp of Saskatchewan (POT.TO) was the biggest decliner by weight on Wednesday, shedding C$9.70, or 4.8 percent, to C$192.00.

That drop helped the materials sector to a loss of 2.2 percent. Also in the group, Agrium (AGU.TO) was down C$4.15, or 4.7 percent, at C$83.78.

Financials, the biggest sector in the index, fell 1.5 percent. Canadian Imperial Bank of Commerce (CM.TO) was off C$1.90, or 2.6 percent, at C$71.51, and Toronto-Dominion Bank (TD.TO) stumbled C$1.14, or 1.7 percent, to C$67.10.

On the economic front, Canada's annual inflation rate came in above expectations in April, raising expectations the Bank of Canada was nearing the end of its rate-cutting cycle.

Paul Hand, managing director at RBC Capital Markets, said that anecdotal evidence suggested high oil prices were starting to be a drag on the consumer and causing nervousness among investors.

Elsewhere on the downside, BlackBerry maker Research In Motion RIM.TO lost C$6.04, or 4.4 percent, to C$131.18, while the tech sector slid 2.2 percent.

The utilities sector was the lone sector on the upside, gaining 0.6 percent.

Market volume was a hefty 573 million shares worth C$10.8 billion. Decliners outpaced advancers 949 to 705. The blue chip S&P/TSX 60 index .TSE60 closed down 17.70 points, or 1.97 percent, at 882.44.

In New York, stocks slumped amid worries over the outlook for the U.S. economy. The Dow Jones industrial average .DJI closed down 227.49 points, or 1.77 percent, at 12,601.19, while the Nasdaq composite index .IXIC fell 43.99 points, or 1.77 percent, to 2,448.27.

($1=$0.98 Canadian)

Editing by Rob Wilson

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