* TSX down 40.91 points, or 0.3 percent at 13,402.31
* Eight of the 10 main groups higher
* Gold prices drop more than 2 percent (Updates to close, adds details, comments)
By Solarina Ho
TORONTO, Jan 4 (Reuters) - Toronto’s main stock index finished its first day of 2011 lower, as blue-chip gold miners were hit by slumping bullion prices, helping to drag down the broader market on Tuesday.
Gold saw its biggest one-day loss since early November, dropping more than 2 percent as hints of an improving global economy diminished safe-haven buying of the precious metal. [GOL/]
Gold miners helped weigh on the TSX’s materials group, which finished down 1.73 percent.
Top producer Barrick Gold (ABX.TO) fell 2.88 percent to C$51.59 while Goldcorp (G.TO) skidded 3.01 percent to C$44.50. Kinross Gold (K.TO) slid 4.07 percent to end at C$18.14 while Agnico Eagle (AEM.TO) sank 6.37 percent to finish at C$71.72.
“You’re going to get days like this: People get nervous, they want to throw in the towel. And the next day, gold and oil are up,” said Irwin Michael, portfolio manager at ABC Funds.
“We expect this volatility to continue ... We expect the market to do better as the year goes on. However, there’s going to be bouts of negativity,” Michael said.
The influential financial group was the only other decliner out of the TSX’s 10 main groups, dipping 0.21 percent in a mixed performance.
Bank of Nova Scotia (BNS.TO) slid 1.42 percent to C$56.29 and Royal Bank of Canada (RY.TO) fell 0.34 percent to C$52.14. That offset advances by Manulife Financial (MFC.TO), which rose 0.7 percent to C$17.27, and Bank of Montreal (BMO.TO), which gained 0.31 percent to C$57.66.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 40.91 points, or 0.3 percent at 13,402.31. Earlier on Tuesday, the TSX hit its highest level since August 2008, before it began retreating.
The index finished 2010 with its best December in five years and a gain of 14.4 percent for the year.
“The bottom line is that markets are very thin, markets are skittish here as well,” said Michael.
“A lot of people are getting back in the saddle so to speak and we don’t expect definite trends to take place. You’ve got to give it a week or so.”
($1=$1.00 Canadian) (Reporting by Solarina Ho; editing by Rob Wilson)