TSX retreats after bin Laden death

Mon May 2, 2011 7:08pm EDT
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By Solarina Ho

TORONTO (Reuters) - Toronto's main stock index closed lower on Monday, after hitting a three-week high earlier in the day, as oil and gas stocks erased gains and the death of Osama bin Laden sapped some of the safe-haven premium out of gold.

The overall materials group, home to gold miners, was down 2.05 percent while the gold sub-index was off 2.69 percent.

Gold miners were hit hard as gold prices fell off record highs as bin Laden's death eroded their safe-haven appeal. Goldcorp was the biggest heavyweight decliner, down 5.24 percent at C$50.12, followed by Barrick Gold, which fell 2.24 percent to C$47.24. Agnico Eagle gave back 3.84 percent to finish at C$63.39.

Energy stocks ended the day off 0.01 percent. They shadowed movements in oil prices, which seesawed through the session as investors weighed the impact of Osama bin Laden's death on crude futures. One of the biggest movers, Imperial Oil, was down 1.14 percent at C$49.43.

"It looks like the market's not quite sure how to take the death of bin Laden," said Laura Lau, senior portfolio manager at Sentry Select Capital Corp.

"Right off the bat oil was down, then it went up, and then it went down again, so they're not quite sure if it's good or bad. What we would expect is there probably will be some retaliation from terrorists for the deaths. Because of that, we can certainly expect added political risk," she said.

The Toronto Stock Exchange's S&P/TSX composite index finished the day down 10.28 points, or 0.07 percent at 13,934.51 after rising more than 1 percent to as high as 14,089.10, its strongest level since April 11, early in the day. Eight of the index's 10 sectors were higher.

Financial stocks, which make up roughly a third of the index's weight, were up 0.81 percent.   Continued...

<p>A Bay Street sign is seen in the heart of the financial district in Toronto, August 17, 2009. REUTERS/Mark Blinch</p>