August 28, 2014 / 11:50 AM / 4 years ago

TSX declines as TD, CIBC slip after results

TORONTO (Reuters) - Canada’s main stock index fell on Thursday as shares of Toronto Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) weakened after the two lenders reported quarterly results.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Bank shares had a strong run-up before their earnings and portfolio managers said that expectations may have gotten ahead of themselves.

News of escalating tensions in Ukraine was another drag, with Ukrainian President Petro Poroshenko saying that Russian forces had entered his country and the military conflict was worsening after Russian-backed separatists swept into a key town in the east.

Investors also processed data showing a stronger-than-expected rebound in the U.S. economy in the second quarter.

“Geopolitics is definitely an issue that could pop up as we enter the fall,” said Youssef Zohny, portfolio manager at Stenner Investment Partners of Richardson GMP Ltd, which manages about C$28.3 billion in assets.

“The Canadian market has been on a hot streak, so it wouldn’t surprise us to see it cool down after such a strong rally,” he added.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 44.48 points, or 0.29 percent, at 15,558.17. Six of the 10 main sectors on the index were in the red.

Financials, the index’s most heavily weighted sector, gave back 0.8 percent.

TD shares lost 0.8 percent, to C$57.38, after the country’s second-biggest bank reported a stronger-than-expected quarterly profit, boosted by gains at its core Canadian retail business.

CIBC’s stock shed 2.2 percent to C$103.23 after the lender reported a higher third-quarter profit, helped by strong gains at its wealth management and investment dealer divisions.

Shares of energy producers were down slightly, with Talisman Energy Inc TLM.TO falling 1.7 percent to C$10.91 and Canadian Natural Resources Ltd (CNQ.TO) declining 0.1 percent to C$46.72.

Editing by Meredith Mazzilli and Chizu Nomiyama

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