January 30, 2012 / 1:32 PM / in 6 years

TSX trims losses, but Europe weighs

TORONTO (Reuters) - The TSX ended lower on Monday in cautious action after Greece and its private creditors failed to come up with a debt deal, but the TSX managed to rebound from early losses in a sign of underlying market resilience.

<p>People walk by a Bay Street sign inside the financial district in Toronto October 10, 2008. REUTERS/Mark Blinch</p>

Heavyweight stocks on the downside included Suncor Energy (SU.TO), down 0.6 percent at C$34.34, First Quantum (FM.TO), down 5.6 percent lower at C$21.74, and Goldcorp (G.TO), which slid 0.9 percent to C$48.78.

The materials sector, home to major miners, skidded 1.1 percent as commodity prices retreated on renewed worries for demand amid fresh concerns over the European financial crisis.

The energy group finished down 0.13 percent.

“We are constantly ebbing and flowing. Mostly ebbing with the European crisis in regard to Greece and all other problems,” said Michael Smedley, executive vice-president and chief portfolio manager at Morgan Meighen & Associates.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 30.08 points, or 0.24 percent, at 12,436.42, with its three key pillars materials, financials and energy dragging the market lower.

Among the sectors in the upside were information technology shares, which rose 1.2 percent, while telecoms gained 0.7 percent.

The Toronto index mirrored softer global markets as new signs of stress in the Portuguese debt market raised fresh fears the European debt crisis was a risk of contagion. <MKTS/GLOB>

A rise in the yield on Portuguese government bonds to more than 17 percent, the highest level since the launch of the euro, sparked fears that Lisbon would follow in Greece’s footsteps and require a second bailout.

As well, a European Union summit on Monday that was to focus on reviving growth and creating jobs failed to deliver the hoped-for message of optimism.

Adding to the push lower, oil prices softened on Monday as markets awaited a deal on Greek debt, while gold headed lower as well. <O/R> <GOL/>

Market jitters around the euro zone’s debt problems was also a big factor pulling down Canada’s dollar against its U.S. counterpart. <CAD/>

But the index finished off its low for the day at 12,338.25. Stocks helping to cushion the slide included Canadian Imperial Bank of Commerce (CM.TO), up 0.6 percent at C$75.49, and Toronto-Dominion Bank (TD.TO), up 0.4 percent at C$77.46.

Overall, the financials group - which has relatively little exposure to Europe versus its international peers - ended 0.14 percent lower.

“We’re again seeing a little bit of concern from Europe, but the effect hasn’t been as severe as it was last year,” said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver.

He added that the mood pointed to a more resilient market, noting a rally in U.S. stocks also helped to pull Toronto higher. .N

In company news, Valeant Pharmaceuticals (VRX.TO) said on Monday it had withdrawn its sweetened takeover bid for ISTA Pharmaceuticals Inc ISTA.O, citing a lack of progress. Valeant shares shed 21 Canadian cents, or 0.4 percent, to C$48.96.

Reporting By Jennifer Kwan; editing by Rob Wilson

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