TORONTO (Reuters) - Toronto’s main stock index finished the first trading day of 2011 lower on Tuesday as blue-chip gold miners were hit by slumping bullion prices.
The gold price had its biggest one-day loss since early November, dropping more than 2 percent as profit-taking and hints of an improving global economy diminished safe-haven buying of the precious metal.
Falling gold-mining shares weighed on the index’s materials group, which finished down 1.73 percent.
Top producer Barrick Gold fell 2.88 percent to C$51.59, while Goldcorp skidded 3.01 percent to C$44.50. Kinross Gold slid 4.07 percent to end at C$18.14, while Agnico Eagle sank 6.37 percent to finish at C$71.72.
“Today was mostly just people who’d made so much money in the last few months, they wanted to take some profits ... I don’t think it was seriously negative in any way,” said Douglas Davis, chief executive at Davis-Rea.
The big financial group was the only other decliner among the index’s 10 main sectors, dipping 0.21 percent in a mixed performance.
Bank of Nova Scotia slid 1.42 percent to C$56.29 and Royal Bank of Canada fell 0.34 percent to C$52.14. That offset advances by Manulife Financial, which rose 0.7 percent to C$17.27, and Bank of Montreal, which gained 0.31 percent to C$57.66.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 40.91 points, or 0.3 percent, at 13,402.31. Early on Tuesday, the TSX hit its highest level since August 2008, before beginning its retreat.
“We expect this volatility to continue ... We expect the market to do better as the year goes on. However, there’s going to be bouts of negativity,” said Irwin Michael, portfolio manager at ABC Funds.
“The U.S. economy seems to be slowly stumbling back, I‘m mildly optimistic, I‘m not extravagantly optimistic. If you made me pick up or down, I would pick up, but slowly,” Davis said.
The index finished 2010 with its best December in five years and a gain of 14.4 percent for the year.
“The bottom line is that markets are very thin, markets are skittish here as well,” Michael said.
“A lot of people are getting back in the saddle so to speak and we don’t expect definite trends to take place. You’ve got to give it a week or so.”
Tempering losses was a 0.19 percent gain by the hefty energy group. Penn West Energy Trust rose 2.77 percent to C$24.50.
Baffinland Iron Mines Corp shares rose 1.4 percent to C$1.45. ArcelorMittal, the world’s largest steelmaker, and private-equity backed Nunavut Iron have been battling for control of the Canadian-based miner, which has recommended ArcelorMittal’s bid. ArcelorMittal said on Tuesday it would not raise its C$550 million bid.
Shares of Enbridge, which plans to shut a U.S. Midwest oil pipeline twice over the next two months to make repairs, fell 1 percent to C$55.71.
Reporting by Solarina Ho; editing by Peter Galloway