TSX falls over 1 percent on soft commodity prices

Mon Oct 26, 2009 5:00pm EDT
 
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By John McCrank

TORONTO (Reuters) - Toronto's main stock index shed more than 1 percent on Monday as commodity prices were undercut by a rally in the U.S. dollar, sending energy and mining shares lower.

The index had been up as much as 143 points early in the session, but then swung the other way as weighty energy and mining stocks started to slide.

Suncor Energy was the biggest drag on the index, with its shares ending down 2 percent at C$37.61, followed by Barrick Gold, which fell 2.5 percent to C$38.60.

The S&P/TSX composite index closed down 147.25 points, or 1.29 percent, at 11,234.88.

"We saw today a big reversal in the U.S. dollar," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"It's moved sharply higher and that's hit commodity prices, and by extension the stock prices of the commodity producers."

Picardo said that since most commodities are priced in U.S. dollars, when the dollar goes up, those prices become more expensive for those using other currencies, weakening demand.

U.S. crude prices settled at $78.68 a barrel, down 2.26 percent, while the price of gold hit its lowest level in more than two weeks, under $1,040 an ounce.   Continued...

 
<p>People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch</p>