TSX ends lower as banks spoil energy rally

Tue Dec 15, 2009 4:47pm EST
 
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By Frank Pingue

TORONTO (Reuters) - Toronto's main stock index limped out of a lackluster session almost right where it began on Tuesday as investors pocketed gains, offsetting the boost that higher oil prices gave energy shares.

Key drags on the index included Royal Bank of Canada, which fell 1.6 percent to C$54.82, and Toronto-Dominion Bank, which dropped 1.9 percent to close at C$65.18.

The pullback in bank shares followed gains recorded on Monday after news that Abu Dhabi threw debt-laden neighbor Dubai a $10 billion lifeline.

The TSX spent the session locked in a tight range and never moved more than 47 points either side of the break-even level as investors had little desire to risk the massive gains recorded this year. The TSX is up 54 percent since slumping to a five-year low in March.

"We had a great year and investors and institutions want to protect what they have," said Irwin Michael, portfolio manager at ABC Funds. "They might have shut down a little early just to maintain whatever good performance they had for the year rather than blow it on something right now."

Keeping the index from falling further was the rally in key energy shares as oil prices rose for the first day in 10 on hopes that colder than normal weather will boost demand for heating oil.

Shares of EnCana Corp, which at one point in the session spearheaded a rise in the TSX, rallied 2.3 percent to C$32.28, while Cenovus Energy shares ended up 2.2 percent at C$26.92.

The S&P/TSX composite index ended down 4.67 points, or 0.04 percent, at 11,541.02. It has closed lower in six of the past nine sessions since hitting a 14-month high on December 3.

($1=$1.06 Canadian)

(Editing by Peter Galloway)

 
<p>People walk by a sign displaying TSX information in Toronto September 19, 2008. REUTERS/Mark Blinch</p>