TORONTO (Reuters) - Toronto’s main stock index fell for a sixth straight session on Wednesday as a rally by gold miners was overshadowed by financial losses on mounting concerns about political turmoil in Greece and Spain’s fragile banking sector.
Equity markets pared losses after euro zone governments authorized the payment of bailout funds to Greece, despite opposition from some member states following inconclusive Greek election results. If Greece were not to receive the money, the debt-stricken country would face financing problems because of a lack of cash.
Gold prices reversed course after hitting a four-month low at $1,579.30 an ounce on Wednesday, helping Canada’s heavily weighted materials sector rise 0.7 percent. <GOL/>
“We’ve seen a good rebound in gold stocks and energy groups, and those two groups have been hit the hardest by the ongoing slump in the index,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
However, Picardo said the turnaround masked weakness in a number of sectors, adding that the index appeared to be repeating its spring slide of the last two seasons.
“This is the third year running that we’ve had Europe cast a shadow on financial markets,” he said.
Greece moved closer to a second snap election on Wednesday when the head of the biggest party launched a new attack on radical leftist Alexis Tsipras, saying his plans for a new government would push the country out of the euro zone.
Investors were also spooked on Wednesday when Spanish bond yields rose above 6 percent, reflecting the rising costs of fixing the country’s banks and fueling fears Europe’s debt crisis could worsen.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished down 29.73 points, or 0.25 percent, to 11,675.01, after earlier hitting a 2012 low at 11,555.08.
It was the TSX’s longest losing skid since early last June, when it fell for eight consecutive periods.
Eight of Canada’s 10 main sectors were lower. Losses were driven by a 0.8 percent drop in the heavyweight financial group. Canada’s two largest banks led the losses, with Royal Bank of Canada (RY.TO) falling 1.3 percent to C$53.37 and Toronto-Dominion Bank (TD.TO) slipping 1 percent to C$79.61.
After an afternoon rally, energy firms ended down 0.2 percent. Oil and gas producers tumbled as U.S. June crude futures slid for a sixth straight session. <O/R>
Canada’s top oil producer, Suncor Energy (SU.TO), fell 2.3 percent to C$29.07.
Canadian stocks have been battered more than their global counterparts due to Canada’s resource-heavy index and “high exposure to gold and oil,” said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
“Canada has taken the brunt of it, although we seem to be the furthest away from any impact of any European disasters,” said Schwartz.
In other company news, shares of Canadian Pacific Railway Ltd (CP.TO) fell 0.6 percent to C$73.25 after activist investor William Ackman’s push to shake up Canada’s second largest railway gathered steam on Wednesday, with a third advisory firm endorsing his entire slate of board nominees ahead of the company’s annual meeting next week.
Editing by Leslie Adler