TSX undercut by falling commodities, U.S. data

Tue Jul 28, 2009 5:22pm EDT
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock index fell hard on Tuesday as sharply lower commodity prices and weak U.S. consumer confidence prompted profit-taking after a big run-up in the index.

Disappointing quarterly corporate results in the United States also convinced investors to pocket some of the market's sharp recent gains.

The slide was headed by the index's mining-laden materials group, which fell 3.5 percent on a drop in gold prices. The energy group dropped 1.92 percent as the price of oil fell.

Shares of miner Goldcorp, the biggest drag on the index, were off 5.92 percent at C$39.11, while Barrick Gold Corp was down 4.2 percent at C$36.21. Kinross was also a heavy loser, down 6.2 percent at C$20.55.

"Commodities certainly are driving it today, and financials are also in the game," said Adrian Mastracci, portfolio manager and president of KCM Wealth Management Inc in Vancouver.

"Today we got a little bit of profit-taking but it's also not too terribly surprising. We've had a long run now. It does point to the fact that some investors are being a little cautious, and rightly so."

The S&P/TSX composite index closed down 186.89 points, or 1.74 percent, at 10,570.54. Nine of its 10 main groups were lower, including the hefty financials, which fell 1.3 percent.

The tumble came a day after the TSX index rallied to its highest level in nearly 10 months and after a 44 percent climb from the five-year low it fell to in March.   Continued...