February 10, 2010 / 3:56 PM / 9 years ago

CANADA STOCKS-TSX drops on Bernanke remarks, Greek worry

* TSX falls 0.5 percent to 11,217.54

* Soft oil and gold prices drag heavyweight resources down

* Bernanke lays out path for policy changes (Adds details)

By Ka Yan Ng

TORONTO, Feb 10 (Reuters) - Toronto’s main stock market index was moderately lower on Wednesday as key oil and gold prices were softer and uncertainty about the euro zone debt crisis and U.S. monetary policy unleashed anxiety about the world economy.

Market players were weighing comments from U.S. Federal Reserve Chairman Ben Bernanke about pulling back on the central bank’s super-loose monetary policy when the time comes, while also guessing at the outcome of Thursday’s European Union summit and a possible rescue plan for debt-strapped Greece. [ID:nWEQ003786] [ID:nLDE6190UP] [ID:nEUROPEAND] [MKTS/GLOB]

Oil and gold prices, which often dictate the direction of Toronto’s resource-laden market, were weaker and pushed down the index’s heavyweight energy and materials groups by more than 1 percent each.

Nearly all the top 20 stocks dragging the index lower were from those two groups, including Barrick Gold (ABX.TO), down 2.1 percent at C$37.55, and EnCana (ECA.TO) down 1.6 percent at C$32.33.

Talisman Energy TLM.TO fell 3.7 percent to C$17.34 as it reported a worse than expected quarterly loss. [ID:nN09104156]

Suncor Energy (SU.TO), whose rating was cut to “sector perform” from “market perform” by RBC, was off 2.9 percent at C$30.94.

At 10:35 a.m. (1535 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 56.70 points, or 0.5 percent, at 11,217.54. It was in positive territory in early trade ahead of Bernanke’s comments.

“Greece continues to be a worry. The second thing that is worrying the market is that Bernanke is talking about beginning to reduce the liquidity in the U.S. market,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“If you’re in a world where everyone is still worrying about Greece and the impact of the financial crisis and the U.S. is beginning to talk about what’s the next step...that makes everyone nervous that that may be happening too soon.”

The U.S. Federal Reserve could begin pulling back its unprecedented stimulus for the economy by first removing some cash from the financial system and then raising interest rates, Bernanke said.

Euro zone countries were holding intensive talks on Wednesday about a possible financial rescue for debt-stricken Greece, but there were conflicting reports on developments and that caused volatility on financial markets.

$1=$1.07 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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