June 9, 2009 / 2:59 PM / 10 years ago

CANADA STOCKS-TSX flat; energy rally offset by US bank worry

* TSX up 4.18 points at 10,53.30

* Energy sector up 0.8 percent

* Worry over U.S. bank stress tests nags (Adds details and comments)

By Frank Pingue

TORONTO, June 9 (Reuters) - Toronto’s main stock index was straddling the break-even level on Tuesday morning as nagging concerns about U.S. bank stress tests weighed on sentiment and offset the boost higher oil prices gave energy shares.

The index unwound an early gain as investors digested a report from a U.S. bailout watchdog panel that suggested bank stress tests should be repeated if the U.S. unemployment rate rises beyond levels assumed by regulators. [ID:nSP195491]

This weighed primarily on the financial index, which was down 0.15. Shares of Royal Bank of Canada (RY.TO) were down 0.6 percent at C$45.83, while Toronto-Dominion Bank (TD.TO) shares were off 0.2 percent at C$58.75.

“There’s more chatter about the stress tests south of the border so that’s certainly weighing,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

“So the Canadian banks are a little bit weaker probably just in sympathy with concerns that in fact the stress tests might not have been fully adequate in scaling this downturn.”

Counterbalancing the banks was the energy sector, which led all groups with a 0.8 percent gain, due in large part to a move in oil prices above $69 after a two-day slide. [ID:nSP387179]

Suncor Energy (SU.TO) shares rose 2.3 percent to C$38.61, while shares of Petro-Canada PCA.TO followed with a rise of 1.9 percent to C$48.68.

“What’s leading the market here is oil,” said Irwin Michael, portfolio manager at ABC Funds.

“We’re also starting to get close to month-end, which is also quarter-end, we’ve got about three weeks to go and there’s lots of cash on the sidelines so investors sitting on too much cash may want to get it moving.”

At 10:45 a.m. (1445 GMT), the S&P/TSX composite index .GSPTSE was up 4.18 points at 10,53.30. Six of the TSX’s 10 sectors were higher.

$1=$1.10 Canadian Editing by Peter Galloway

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