April 7, 2010 / 2:50 PM / 9 years ago

CANADA STOCKS-TSX drops with oil price; banks fall

* TSX down 0.3 percent to 12,118.22

* Energy, financials lead index lower

By Claire Sibonney

TORONTO, April 7 (Reuters) - Toronto’s main stock index fell for a second session on Wednesday as oil prices slipped and investors moved to the sidelines after the market’s recent rally and ahead of the start of first-quarter earnings season.

Oil fell from 18-month highs around $87 a barrel after two weeks of gains, and the Toronto index’s energy sector dropped more than 1 percent in response. [O/R]

Shares of Suncor Energy Inc (SU.TO), Canada’s largest oil company, dipped 0.7 percent, while natural gas major EnCana Corp (ECA.TO) fell 1.2 percent to C$32.47.

“For now the commodities are taking us down again,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services.

Miners were also down as demand for copper waned [MET/L]. Teck Resources TCKb.TO was off 0.4 percent at C$46.58, and uranium miner Cameco Corp (CCO.TO) slid 0.6 percent to C$26.97.

The financial group retreated 0.6 percent with Royal Bank of Canada (RY.TO), the country’s biggest lender, falling 0.7 percent to C$59.04, and Toronto-Dominion Bank (TD.TO) dropping 0.6 percent to C$73.76.

“Canadian financials look like they’ve peaked in the short term,” Schwartz said. “It’s a directionless market, we’re waiting for first quarter earnings and seeing how they play out.”

At 10:20 a.m. (1420 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 38.49 points, or 0.3 percent, to 12,118.22.

At the start of the week, the index hit 12,203.39, its highest level since September 2008.

“The TSX in our opinion is fairly valued or close to fairly valued so we don’t see a ton of upside heading into the rest of the year,” Schwartz said.

Canadian Tire Corp (CTC.TO) (CTCa.TO) shot up more than 3 percent to C$67.00 after the country’s biggest household goods and automotive chain said it expects annual operating earnings per share to rise by 8 percent to 10 percent over the next five years. [ID:nN0798625]

$1=$1.00 Canadian Reporting by Claire Sibonney, editing by Peter Galloway

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