June 9, 2010 / 9:21 PM / 9 years ago

CANADA STOCKS-TSX ends lower as Fed report hits confidence

* TSX closes down 66.54 points at 11,450.64

* Financials, gold issues weigh

* Energy, base metals higher (Adds details, quotes)

By Claire Sibonney

TORONTO, June 9 (Reuters) - Toronto’s main stock index fell on Wednesday in another rocky finish as investor sentiment soured after the Federal Reserve’s Beige Book said economic growth was subdued in many regions of the United States.

The TSX’s economically sensitive financial sector fell 1.2 percent in reaction. Royal Bank of Canada (RY.TO) dropped 1.6 percent to C$52.03, and Toronto-Dominion Bank (TD.TO), was down 1.2 percent at C$68.89.

Both banks reported weaker than expected earnings nearly two weeks ago, which has been weighing on the sector ever since.

As well, gold stocks ended more than 2 percent lower as the price of the precious metal retreated from the record high it set on Tuesday. [GOL/]

Barrick Gold Corp (ABX.TO), the world’s largest producer, dropped 2.1 percent to C$44.55, while Goldcorp Inc (G.TO) also declined 2.1 percent to C$45.44.

“Firstly, it’s the same old pattern that we’ve seen for days on end now. But today there were a couple factors that led to most of the gains evaporating in the last hour of trading,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

Picardo was referring to the Fed’s Beige Book, a collection of information from across the United States, which described the pace of economic growth in many regions as “modest”. [ID:nN09133847]

“The second factor was the euro gave up most of its gains during the day and broke below the critical level of $1.20. The market is totally transfixed on the euro’s fluctuations as a proxy for everything that is going wrong with the global economy,” he said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 66.54 points, or 0.58 percent, at 11,450.64.

Bruce Latimer, a trader at Dundee Securities, said the last hour of trading in recent weeks has been critical to direction in the markets, as the trend has seen stocks selling off hard in that time.

“The day traders and fast money traders are pretty content to go home flat at night,” he said.

“The market is just so volatile, a lot of people are more content to trade in the markets during the day rather than try to take an overnight stance on it.”

Earlier, the index rallied after unofficial data said China’s exports in the month rose about 50 percent from a year earlier, fueling a run to assets that would benefit from an economic rebound. [ID:nTOE65805R]

That boosted the prices of oil above $74 a barrel, sending the energy sector up 0.1 percent, with Suncor Energy (SU.TO), the country’s largest oil producer, jumping 1.7 percent to C$32.50. [O/R]

“Crude oil prices are quite strong and that just points to how irrational investors sometimes behave,” added Picardo.

“With all that’s going on in the Gulf of Mexico, you’re not allowed to drill there, there’s a moratorium on deep sea drilling, and if demand comes back into the market you’ll see long-term crude prices move up quite substantially.”

Copper also rallied on the news from China, lifting the mining subsector 0.2 percent with First Quantum Minerals (FM.TO) climbing 2.7 percent to C$51.37. [MET/L]

$1=$1.04 Canadian Reporting by Claire Sibonney; Editing by Rob Wilson

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