TORONTO (Reuters) - Canadian stocks finished down for a fourth straight session on Monday as mining and energy shares continued to slide after the election of anti-austerity leaders in Greece and France fanned concern about the euro zone debt crisis.
The weekend elections in the two European countries heightened the uncertainty of the path ahead for the euro zone debt crisis. Stocks initially tumbled, though by end of day markets had largely shrugged off earlier losses. <MKTS/GLOB>
The impact from the switch in governments in France and Greece was likely already discounted in last week’s dive in the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE, said Rick Hutcheon, president and chief operating officer at RKH Investments.
“Generally, markets like we saw on Friday are telling you that somebody is smelling a shift in the winds, and as it turns out that’s exactly what did happen,” said Hutcheon. “Markets consolidated and today you’re seeing the recognition of that reality.”
On Monday, the TSX closed down 10.57 points, or 0.1 percent, at 11,860.66, after earlier touching a 2012 low at 11,785.74.
The resource-heavy index was again hurt by a slide in materials, down 1.6 percent, and energy stocks, which fell 0.3 percent. Both sectors trimmed losses after oil, gold and metal prices rebounded from multi-month lows. <O/R> <GOL/> <MET/L>
Among material stocks, the most influential decliners included top fertilizer producer Potash Corp (POT.TO), down 1 percent to C$41.89, Goldcorp Inc (G.TO), off 1.4 percent to C$35.93, and First Quantum Minerals (FM.TO), which sank 3.7 percent to C$18.13.
Inmet Mining Corp IMN.TO fell 8 percent to C$46.25 after the Toronto-based miner on Monday raised projected development costs for its Cobre Panama copper project in Central America by more than 25 percent to $6.2 billion.
Energy losses were led by Nexen NXY.TO, down 2.9 percent to C$17.26 and Penn West Petroleum PWT.TO, off 3.7 percent to C$15.06.
TransGlobe Energy Corp TGL.TO fell 7.3 percent to C$12.24 as crude prices slid, even though the oil and gas company reported its quarterly profit rose nearly four times.
Hutcheon said the weakness in the heavily-weighted materials and energy sectors since the beginning of April was supportive of the seasonal nature of the TSX and the index’s spring swoons of the last two years.
“There’s a tremendous seasonality in these things,” he added. “The market is going to flounder around in here and try to figure out what’s going to happen after the next election, which is the U.S. election.”
So far this quarter Canada’s material sector .GSPTTMT is down 11.4 percent, while the energy group .SPTTEN has shed 5.6 percent.
Despite the uncertainty in Europe, financial shares edged up 0.4 percent on Monday as Canada’s major banks performed well. Bank of Nova Scotia (BNS.TO) led the sector’s slight gains, up 1.5 percent to C$53.59.
“The Canadian banks are always perceived as a relative safe haven and that perception gets magnified when we have problems on the other side of the Atlantic,” said Robert Kavcic, an economist at BMO Capital Markets.
In other news, Thompson Creek Metals TCM.TO slid more than 16 percent to C$4.61 after the molybdenum miner said it plans to raise up to $430 million to help develop the Mt. Milligan copper-gold mine in British Columbia. Toronto-listed shares of the Denver-based company have fallen some 33 percent this year.
Editing by Leslie Adler