TORONTO (Reuters) - Canada’s main stock index edged lower on Monday as investors took money out of recently rising energy stocks in trade made sluggish by the U.S. Memorial Day holiday, but banks firmed ahead of closely watched quarterly earnings reports.
The energy sector, which accounts for more than 20 percent of the index’s value, was down more than half a percent even as crude oil prices rose.
Seven of the eight heaviest drags on the index were oil and gas-related companies, with Enbridge Inc (ENB.TO) off 2.1 percent at C$60.71, and Cenovus Energy Inc (CVE.TO) giving up 1.8 percent to C$20.95.
One strategist said some energy stocks may have bounded too far ahead as oil prices rallied off January’s trough, with crude prices now moving sideways.
“I think the tendency is if you’re seeing quick profits, especially in the oil space, then you take them when you can,” said Elvis Picardo, strategist at Global Securities.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 13.36 points, or 0.09 percent, to close at 15,187.40, helped by gains in telecoms and utilities.
The heavily weighted financials group rose a bit as investors awaited bank earnings this week for clues on the economy.
“The big thing this week will be bank earnings. Not only what they report, but the tone of what they’re saying. I think they’re going to say the landscape is positive,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
Global’s Picardo said Bank of Nova Scotia (BNS.TO), the most international of Canada’s banks, could be useful as a barometer of global economic health, while Royal Bank of Canada (RY.TO) and Bank of Montreal (BMO.TO) offer domestic focus. Toronto-Dominion Bank (TD.TO), with major operations south of the border, is considered a decent proxy for U.S. growth, while all of the country’s Big Six banks must deal will the fallout of low oil prices.
Reporting by Solarina Ho; Editing by Peter Galloway