February 29, 2012 / 4:43 PM / 7 years ago

CANADA STOCKS-TSX knocked lower as materials falter on weak gold

* TSX down 107.69 points at 12,632.78

* Materials group falls 2.4 percent

* Six of 10 main sectors lower

By Jennifer Kwan

TORONTO, Feb 29 (Reuters) - Toronto’s main stock index turned lower on Wednesday morning as materials issues faltered on weak gold prices, which skidded after comments by U.S. Federal Reserve Chairman Ben Bernanke helped to push up the U.S. dollar.

The key materials sector, which accounts for some 20 percent of the broader Toronto index, was down 2.4 percent to lead the market lower. Barrick Gold fell nearly 3 percent to C$47.79 and Goldcorp sank 3 percent to C$48.10 on weaker gold prices.

Gold prices fell more than 3 percent on Wednesday as the euro tumbled to a session low against the U.S. dollar after Bernanke suggested the Fed was unlikely to engage in more monetary easing in the short term.

“In our view, there had been a lingering perception that he might announce or give a stronger hint toward quantitative easing. Some of that probability filtered out of the market so the (U.S.) dollar jumped when he didn’t make any further reference towards that, gold pulled back and Treasury yields moved higher,” he said.

“The fact that the (U.S.) dollar jumped at the time was probably a negative factor for stocks.”

At 10:55 a.m. (1555 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 107.69 points, or 0.85 percent, at 12,632.78, with six of its 10 main sectors lower. The market had risen after the open, climbing as high as 12,788.63.

On the upside, the economy-linked financials sector, which accounts for about a third of the broader Toronto index, gained 0.3 percent. Royal Bank of Canada rose 0.3 percent to C$55.77, while Toronto Dominion Bank climbed 0.7 percent to C$80.95. Bank of Nova Scotia gained 0.4 percent and was at C$53.79.

Supporting the earlier move higher was data that showed the U.S. economy grew slightly faster than initially thought in the fourth quarter on firmer consumer and business spending, fueling investor optimism.

As well, euro zone banks grabbed 530 billion euros at the European Central Bank’s second offering of three-year funds, fuelling expectations that credit will flow to businesses and borrowing costs will ease for governments hit by the region’s debt crisis.

“We got some pretty good news out of Europe and we’re excited that the bond yields there continue to fall,” said Barry Schwartz, portfolio manager at Baskin Financial Services. He also noted that the market had responded positively to the upward revision in fourth-quarter U.S. GDP figures.

In company news, publisher Torstar Corp, owner of the Toronto Star newspaper, posted a fourth-quarter profit that beat expectations, as cost cuts offset weak print advertising revenue. However, it said the revenue outlook for the media unit remains uncertain for the year.

Torstar shares added 4.3 percent to C$9.75.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below