TORONTO (Reuters) - Canada’s main stock index was little changed on Wednesday, with declines in bank stocks partly offset by a jump in gold miners, as weak economic data from the euro zone and worries about the Cyprus bailout dragged on investor sentiment.
Gold-mining stocks benefited from a jump in the price of bullion, whose appeal as a safe haven tends to increase on negative economic news.
Confidence in the euro zone’s economy dropped in March, after four straight months of gains, the European Commission said.
Europe remains mired in recession and has been showing mixed signs of a recovery.
“The situation in Europe represents a short-term risk for the market. The resurgence in those concerns is a source of volatility,” said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.
“The near-term risk relates to the confidence in the financial system in Europe and the reverberations around the world,” he added.
After securing a bailout deal, Cyprus will reopen its banks on Thursday while limiting withdrawals, banning checks and curbing the use of Cypriot credit cards abroad, among measures imposed to avert a bank run.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE unofficially closed down 6.73 points, or 0.05 percent, at 12,699.65. It earlier fell to 12,622.50, a one-month low.
Five of the 10 main sectors on the index were higher.
Bank stocks reacted most sharply to the euro zone worries, losing 0.9 percent. Royal Bank of Canada (RY.TO) gave back 1.3 percent to C$60.71, and Toronto-Dominion Bank (TD.TO) fell 0.9 percent to C$83.95.
Energy shares declined 0.2 percent despite higher oil prices.
The materials sector, which includes mining stocks, added 1.1 percent as gold stocks climbed. Gold prices were up on the bleak news out of Europe.
Gold shares, down about 16 percent since the start of the year, advanced 1.8 percent.
“I like them as buys,” Matt Skipp, president of SW8 Asset Management, said of gold stocks. “I see it as a nice entry point for the first time in a couple of years.”
In company news, the battle for Agrium Inc’s AGU.TO future intensified ahead of an April 9 vote after the two most influential proxy advisory firms disagreed on the candidates shareholders should back in the election for Agrium’s board of directors.
Shares of the fertilizer maker were down 0.7 percent at C$99.69.
Editing by Peter Galloway and Leslie Adler