TSX snaps 8-day rally as resources, banks sag

Mon Feb 22, 2010 5:16pm EST
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock index closed lower on Monday, snapping an eight-day stretch of gains, dragged down by weakness in resources and financials.

Gold stocks were among the falling issues on Monday as the price of bullion retreated from one-month highs. Barrick Gold (ABX.TO: Quote) was off 2.27 percent at C$40.07 to lead all influential decliners. Goldcorp (G.TO: Quote) skidded 1.54 percent to C$39.70.

Energy shares were also lower, despite oil prices that edged above $80 a barrel as a French refiner strike and tensions over Iran's nuclear program outweighed gains in the U.S. dollar. <O/R>

Suncor Energy Inc (SU.TO: Quote) was also under pressure as the country's biggest energy company said it expects a fire-damaged oil sands upgrader to be out of service until early April, forcing it to cut its production targets for the year. Suncor fell 1.2 percent to C$31.55.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 74.54 points, or 0.64 percent, at 11,634.75. Six of the index's 10 main groups were lower. The eight-session rally had boosted Toronto's main index almost 5 percent.

Some profit-taking was overdue, market players said, as the quarter's crop of company results was fairly healthy.

Investors were also still assessing the implications of the Federal Reserve's move to hike its discount rate last week, which raised speculation that the U.S. central bank might raise its key fed funds rate earlier than expected. Greece's unresolved debt woes also remained on investors' radar.

"I think we're going to pause here for a while. Earnings have been good. We had a bit of a jolt in terms of the discount rate hike so interest rates are still a bit of a concern," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "But the tone is healthy."   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto in this November 9, 2007 file photo. REUTERS/Mark Blinch</p>