August 8, 2012 / 1:12 PM / 6 years ago

Energy, bank stocks lead TSX to lower close

TORONTO (Reuters) - Canada’s benchmark stock index closed lower on Wednesday, weighed down by a drop in heavyweight energy, financial and mining stocks that eclipsed a strong showing from the country’s largest telecom player, BCE Inc (BCE.TO).

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

A slew of major companies posted declines of more than 1 percent, breaking a two-session rally that had pushed the index to a one-month high.

The rally was driven by hopes for central bank action to tackle the euro zone debt crisis. But that early optimism has started to fade. <MKTS/GLOB>

“There is still enough concern out there that there are ready sellers,” said David Cockfield, a portfolio manager at Northland Wealth Management. “It remains a market that is looking over its shoulder all the time.”

Cockfield added that a stronger Canadian dollar did not help local equities, as investors moved some investments into U.S. markets which inched higher for a fourth day. <CAD/>.N

Energy and energy-related stocks played the biggest role of any sector in leading the market lower.

Among the heaviest weights were Suncor Energy (SU.TO), which dipped 1.6 percent to C$31.73, TransCanada Corp (TRP.TO), which slipped 2.3 percent to C$45.03, and Enbridge Inc (ENB.TO), down 1.9 percent at C$39.25.

Banks that contributed to the decline included Bank of Nova Scotia (BNS.TO), which fell 1.2 percent to C$51.97, Royal Bank of Canada (RY.TO), down 1 percent at C$51.35, and Bank of Montreal (BMO.TO), which ended 1 percent lower at C$56.97. Insurer Manulife Financial fell 2 percent to C$10.83.

BCE Inc (BCE.TO), the parent of Bell Canada and the country’s largest telecom company, played the biggest role of any one stock in preventing the market from falling further. Its shares gained 2.4 percent to C$44.30.

Montreal-based BCE’s second-quarter profit beat expectations as growth in its wireless unit spurred the company to lift its full-year earnings outlook and dividend payout.

“There is still a huge demand for yield and Bell will hit that category,” said Paul Hand, a managing director at RBC Capital Markets.

Research In Motion Ltd RIM.TO shares boosted the technology sector. The stock rose 3.3 percent to C$7.56 a day after an influential analyst suggested the BlackBerry maker could revive talks to license its new operating system to smartphone leader Samsung Electronics.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 82.46 points, or 0.7 percent, at 11,781.04. On Tuesday it had closed at its highest level since July 4.

Other movers included Air Canada ACb.TO, which fell 7.8 percent to C$1.06 after the country’s largest airline posted a wider quarterly loss and said labor disruptions and the closure of its plane maintenance contractor crimped its operations.

Shares of Silver Wheaton Corp SLW.TO rose 3.7 percent while HudBay Minerals Inc (HBM.TO) slipped 1 percent on a deal that will see Silver Wheaton help finance the development of HudBay’s Constancia mine in Peru in exchange for the right to purchase precious metal byproducts from the base metal miner.

Junior miner Endeavour Mining Corp (EDV.TO) said it would buy Avion Gold Corp AVR.TO for C$389 million, sending its own shares down 17 percent while pushing Avion’s up 21 percent, yet still below its offer price of 88 cents a share.

Editing by Jeffrey Hodgson

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