TORONTO (Reuters) - Toronto’s main stock index rallied off a one-week low but still closed lower for a third straight session on Monday as investors avoided commitments ahead of the U.S. Federal Reserve meeting later this week.
The index’s heavily weighted financials group led the latest slide as investors opted to avoid big positions, possibly until Wednesday, when the Fed’s Federal Open Market Committee (FOMC) is expected to hold interest rates unchanged at near zero percent.
Shares of insurer Manulife Financial, the biggest drag on the index, closed down 1.8 percent to C$22.37, while Toronto-Dominion Bank fell 0.9 percent to C$67.95.
The index’s fall was limited as some big energy stocks pushed higher on hopes of higher prices for oil and natural gas down the road.
Canadian Natural Resources rose 2.4 percent to C$73.92, while Imperial Oil ended the session up 2 percent at C$41.34.
The S&P/TSX composite index ended down 21.34 points, or 0.19 percent, at 11,424.61. Seven of the TSX’s 10 sectors ended lower.
Shortly after the session started, the TSX fell 1 percent to 11,329.50, its lowest level since September 14. It subsequently rallied off that low but never entered positive territory.
“There’s no conviction but that’s quite typical when you have something else as critical as the FOMC news later this week,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
“But the bottom line is that the market continues to be tremendously resilient. I think a lot of money is on the sidelines and some of it may have been put to work here.”
The TSX is up 52.7 percent since it tumbled to a five-year low in March, but the size of recent session gains has been contained by the reticence of the market to buy until there is further proof of economic recovery.
Potash Corp of Saskatchewan, the world’s biggest fertilizer producer, was a drag on the index after lowering its 2009 earnings target late last week. Shares of the company ended down 1.6 percent at C$100.21.
The index’s information technology group, up 1.7 percent, was the major gainer, helped by BlackBerry-maker Research In Motion, whose shares rose 1.6 percent to C$90.67.
Reporting by Frank Pingue; editing by Peter Galloway