April 16, 2012 / 1:37 PM / in 6 years

TSX takes a breather after seven-week selloff

TORONTO (Reuters) - Toronto’s main stock index paused on Monday after posting its seventh straight weekly loss in the last session, as concerns over Europe’s debt crisis and slowing growth in China offset some better-than-expected U.S. economic data.

Among the most influential decliners on the index, Barrick Gold (ABX.TO) fell 1.7 percent to C$40.79, Silver Wheaton SLW.TO tumbled 4.7 percent to C$29.67 and First Quantum Minerals (FM.TO) lost 3.4 percent to C$20.88.

“People are starting to bet that the repeat of the selloff of 2010 and the repeat of another selloff in 2011 is probably going to occur in this environment... I have a difficult time wanting to swallow the whole assumption,” said Sid Mokhtari, market technician at CIBC.

“People have already been reducing so much exposure to some of these commodity names, I don’t see much of a significant downside.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 2.80 points, or 0.02 percent, at 12,037.59 Five of the 10 sectors were in negative territory, including materials, off 1.4 percent.

Financials and telecoms were among the biggest gainers, up 0.7 percent and 0.4 percent respectively. All of the five big banks were higher, led by Toronto-Dominion Bank (TD.TO), up 0.9 percent to C$82.70 and Bank of Nova Scotia (BNS.TO), up 1 percent to C$54.63.

“Those are two areas of course where people, while they don’t know what to do in the market, look at these as buy-and-hold things simply for the dividend payments because they’re very attractive in today’s interest rate environment,” said Fred Ketchen, director of equity trading at Scotia McLeod.

Investors were also anxious for earnings season to pick up south of the border, where a 4 percent slide in Apple (AAPL.O) hurt confidence. .N

Earnings season will pick up steam this week, with 86 S&P 500 companies scheduled to report results. According to Thomson Reuters data through Monday, of the 34 S&P 500 companies to have reported earnings so far, 76 percent have reported earnings above analysts’ expectations.

On the economic data front, Americans shrugged off high gasoline prices in March and spent more strongly than expected, suggesting economic growth in the first quarter was probably not as weak as many had feared.

A recent string of soft economic data, highlighted by the recent March U.S. payrolls report, increased worry the economic recovery had begun to slow.

Market sentiment in the euro zone was still on edge as Spanish 10-year government bond yields broke through the 6 percent mark for the first time since December, sparking a record-breaking rally in low-risk German debt.

“Greece was the first drag, Spain is the second drag, and the question is after they get finished with Spain, who comes next, it might be Italy for goodness’ sake,” added Ketchen.

Editing by Chizu Nomiyama

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