July 2, 2010 / 3:14 PM / 9 years ago

CANADA STOCKS-TSX edges lower, gold selloff main drag

* TSX down 0.1 percent at 11,283.24

* Gold stocks dive after Thursday’s bullion selloff

* U.S. payrolls fall for the first time this year (Adds details)

By Ka Yan Ng

TORONTO, July 2 (Reuters) - Toronto’s main stock market index was lower on Friday morning, offering a mixed reaction to report that showed U.S. employment fell in June, the first monthly drop this year, but tugged lower by diving gold-mining shares.

At 10:40 a.m. (1440 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 11.18 points, or 0.1 percent, at 11,283.24, starting the second half of the year on a soft note after losing about 6 percent in the past two weeks.

Seven of the index’s 10 sectors were higher, but the big materials group was down 2.1 percent, playing catch-up after commodity prices, especially bullion, were hit hard on Thursday.

Canadian financial markets were shut on Thursday for Canada Day.

“It’s been quite unidirectional in the last two weeks. Perhaps the market is taking a bit of a breather,” said Francis Campeau, broker at MF Global Canada in Montreal.

“The market’s looking for direction, back from one day off. We’re actually holding quite well.”

The index fell hard in the opening minutes, down 0.5 percent, after the U.S. jobs figures were assessed, and then turned briefly positive, tracking U.S. stock markets, which also held near the break-even point.

U.S. nonfarm payrolls fell 125,000 in June, the largest decline since October, against expectations for a 110,000 drop, as thousands of temporary census jobs ended. The jobless rate edged up to 9.8 percent from 9.7 percent in May. [ID:nN0116516]

Gold-mining issues were the main drag on the index following the drop in bullion prices on Thursday. Barrick Gold (ABX.TO) was off 3.8 percent at C$46.45, while Goldcorp G.TO was off 4 percent at C$44.75. [ID:nN02197484]

Mining issues failed to get a lift from news that Australia dumped its proposed “super profits” tax on the sector in favor of a lower resource rent tax. Nor did a bounce in copper and gold prices help shares in the materials sector.

Energy shares held up despite the softer price of oil, which had slumped on Thursday. Imperial Oil (IMO.TO) and Husky Energy (HSE.TO) were among the key advancers, up about 1.6 percent each.

$1=$1.06 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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