February 24, 2011 / 2:02 PM / 6 years ago

TSX extends slide as oils, golds retreat

4 Min Read

TORONTO (Reuters) - Toronto's main stock index closed lower for a fourth straight session on Thursday as energy and gold-mining issues retreated after rising for several days in reaction to the upheavals in North Africa.

The energy group, which had advanced more than 8 percent with gains in eight of the previous nine sessions, fell 1.88 percent. Suncor Energy slumped 4.51 percent to C$44.00, while Canadian Natural Resources shed 2.2 percent to C$47.06.

Oil prices skidded after rallying to 2-1/2-year highs, with traders citing a rumor that Libyan leader Muammar Gaddafi had been shot as one reason for the late selloff.

"The energy (sector) really seems to be taking a hit here, but it has had a very good gain," said John Kinsey, a portfolio manager at Caldwell Securities Ltd.

Violence in Libya, and worries the crisis could spread to other oil-producing countries in the Middle East, had sent crude prices soaring over the last several sessions.

Gold miners were also in heavy retreat and helped drag the overall materials group 2.2 percent lower.

Barrick Gold sank 3.03 percent to C$50.23, while Agnico Eagle sagged 4.19 percent to C$67.70. Goldcorp, which reported a surging profit and raised its dividend payout after markets closed, was off 2.61 percent at C$44.45.

Bullion prices erased earlier gains as worries eased somewhat over soaring oil prices and escalating turmoil in Libya.

News that the world's No. 2 gold producer, U.S.-based Newmont Mining was forecasting lower gold and copper production this year may also have weighed on the sector, Kinsey said.

The Toronto Stock Exchange's S&P/TSX composite index fell 88.88 points, or 0.64 percent, to finish at 13,867.31. Five of the 10 main groups retreated.

The index has given back all of its gains from last week, when it closed above 14,000 points for the first time since July 2008.

"Everything was pretty much overbought ... The geopolitical unwinding of (Libya) is going to cause a lot of volatility up and down until things sort out, and they may not sort out for a while," said John Ing, president of Maison Placements Canada.

"I'm afraid this is going to be the norm for a while ... The market has been driven by more emotion than really substance. Some of the stocks, particularly oil, got really ahead of themselves, and are going to pull back."

Offsetting losses was a 1.4 percent rise by financial issues, as Canadian Imperial Bank of Commerce and National Bank of Canada both posted stronger than expected profits on Thursday.

CIBC shares jumped 3.43 percent to C$82.43 to lead the gainers, while National Bank shares rose 2.54 percent to C$73.60.

Other banks followed suit, with Bank of Montreal climbing 2.05 percent to C$61.77 and Bank of Nova Scotia gaining 1.45 percent to finish at C$59.35.

"It was really the financials (group) that was leading the parade today," said Kinsey. "If there was one disappointment it would be (CIBC) didn't raise their dividend."

The healthcare group was another strong gainer, climbing 1.98 percent. Valeant Pharmaceuticals rose 3.22 percent to C$39.40 after posting earnings and revenue that topped expectations.

Consumer discretionary shares tumbled 1.73 percent, weighed down by Magna International Inc, which sank 9.71 percent to C$49.63, after the world's No. 3 auto-parts maker posted disappointing quarterly earnings and margin forecasts.

Reporting by Solarina Ho; editing by Rob Wilson

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