TSX closes lower on euro zone rescue doubts

Tue Oct 25, 2011 5:41pm EDT
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By Jon Cook

TORONTO (Reuters) - Toronto's main stock index ended moderately lower on Tuesday, giving up earlier gains that took it to a one-month high, as pessimism set in over an upcoming European summit.

World stocks stumbled after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe's debt crisis.

"The decline we're seeing in the markets broadly may reflect some disappointment yet again that Europe is not going to be a quick fix," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

The Toronto Stock Exchange's S&P/TSX composite index ended down 52.53 points, or 0.43 percent, at 12,109.75.

The index at one point reached 12,230.82, its strongest level since September 20.

"We've had a pretty good rally anticipating a positive outcome (from the European meetings), which I don't think will be as neat and clean as politicians are wont to do," Paul Hand, managing director at RBC Capital Markets, said early in the session.

After being up for most of the day, 8 of the TSX index's 10 main sectors finished lower, with energy and financials leading the charge.

Canadian financial shares have frequently moved in sympathy with their European peers, which have see-sawed on developments in the European debt crisis. Toronto-Dominion Bank was the market's biggest laggard, falling 1.7 percent to C$73.68.   Continued...

<p>Skyscrapers loom over a flagpole carrying the Canadian flag in the financial district in Toronto, March 11, 2009. REUTERS/Mark Blinch</p>