June 14, 2012 / 12:48 PM / in 5 years

TSX eases as Greek vote looms, RIM drops

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

TORONTO (Reuters) - Canada’s main stock index fell broadly on Thursday as investors took a cautious approach ahead of Sunday’s Greek election, and sold tech shares after Research In Motion’s RIM.TO latest board shuffle.

U.S. stocks jumped after news major central banks are preparing coordinated action if the results of the Greek election generate turmoil in financial markets, but the Toronto market hedged its bets ahead of the vote, which could decide the country’s fate in the euro zone

Hopes that the U.S. Federal Reserve could signal more easy money when it releases a policy statement next week also prompted U.S. stocks to rise, but the Canadian market failed to keep pace.

“I‘m not sure that Toronto is breathing the same air as the rest of the globe today,” said Barry Schwartz, portfolio manager at Baskin Financial Services.

Adding to Canadian market nervousness, the Bank of Canada said the country’s financial system remains highly vulnerable to a further deepening of the European debt crisis.

Eight of the 10 subgroups of the Toronto benchmark fell, with the info tech sector leading the way with a 1.7 percent decline, courtesy of Research In Motion’s RIM.TO 3.5 percent slide.

The BlackBerry maker fell 39 Canadian cents to C$10.61 after announcing a minor board shuffle as part of its effort to reverse its tumbling market share.

“There seems to be disappointment at the limited change it made to its board,” said Fergal Smith, managing market strategist at Action Economics in Toronto.

The consumer staples sector retreated by 1.2 percent on the back of stocks such as cheesemaker Saputo Inc. (SAP.TO), down 2.0 percent at C$40.99, and grocer George Weston Ltd (WN.TO), which fell 2.1 percent to C$57.66.

The only sectors to rise were health care, up 1.2 percent, and energy, which rose less than 0.1 percent.

All told, the S&P/TSX composite index .GSPTSE retreated 33.79 points, or 0.29 percent, to 11,464.08.

Worries over Spanish debt and the upcoming Greek vote have led to up-and-down markets this week.

However, the main Canadian and U.S. indexes have stayed largely within recent ranges, suggesting that big, but short-lived, swings are the result of investor jitters, rather than fundamental shifts in strategy, Smith said.

“They’re both struggling to break out ahead of big risk events in the coming days,” he said.

Spain’s 10-year bond yield rose to a record euro-era high on Thursday following a three-notch downgrade in Spain’s credit rating by Moody’s Investors Service late on Wednesday, which took its rating to within one notch of “junk” status.

Adding to the global uncertainty were weak U.S. jobless claims figures on Thursday that showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week.

Among individual movers, Canadian travel operator Transat AT Inc TRZb.TO plunged 36 Canadian cents, or 8.3 percent, to C$4.00, after it posted a big quarterly loss on higher fuel costs and stiff price competition.

Analysts said markets would remain volatile in the near term.

“We have to wait until after the election in Greece on the weekend,” said Fred Ketchen, director of equity trading at ScotiaMcLeod. “Spain still has its problems and who knows what’s going to happen to some of the other countries that are mixed up in this whole sad state.”

($1=$1.02 Canadian)

Reporting By Cameron French, additional reporting by Jon Cook; Editing by Peter Galloway

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