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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.
Once the market began to give back its early gains, traders took the opportunity to pocket some profits after the market's strong run from the past couple of weeks, said Bruce Latimer, a trader at Dundee Securities.
Financials had a strong start, helped by a share-price target hike on all of Canada's Big Five banks by Genuity Capital. But they also reversed course to finish in the red.
Royal Bank of Canada shares dropped 0.8 percent to C$55.66, while Bank of Nova Scotia shares fell 1 percent to C$45.86.
CI Financial managed to buck the trend in financials, ending 0.8 percent higher at C$19.85 after it said it reached an agreement to sell Blackmont Capital Inc to Australia's Macqurie Group for C$93.3 million.
Industrial equipment supplier Toromont Industries reported lower earnings, but they still beat estimates. Its revenues came in below expectations and the company said its results would be depressed for the current quarter as well.
The company's shares ended down 0.9 Canadian cents at C$24.80.
Reporting by John McCrank; editing by Peter Galloway