November 10, 2009 / 3:50 PM / 9 years ago

CANADA STOCKS-Oil shares lead broad TSX retreat

 * TSX falls 0.21 percent to 11,462.23
 * Five-day rally halted by profit-taking, resources drop
 * Cossette agrees to be acquired by Mill Road Capital  (Adds details)
 By Ka Yan Ng
 TORONTO, Nov 10 (Reuters) - Toronto’s main stock index fell on Tuesday morning as Canadian Natural Resources (CNQ.TO), Suncor Energy (SU.TO) and other oil shares dropped after running up in a five-day market rally.
 The resource-rich index was also hit by declining gold-mining stocks as the price of gold XAU= [GOL/] softened.
 Canadian Natural led all decliners, falling 2.1 percent to C$70.57, while Suncor was off 1 percent at C$36.96. Oil company EnCana (ECA.TO) weakened 1.1 percent to C$62.05. These three stocks made up the biggest drags on the index even though the price of oil  CLc1 popped over $80 a barrel.
 Key decliners also included fertilizer producer Potash Corp, which lost 1.2 percent to C$104.27, and Goldcorp (G.TO), down 0.3 percent at C$46.38.
 At 10:27 a.m. (1527 GMT), the S&P/TSX composite index .GSPTSE was down 24.65 points, or 0.21 percent, at 11,462.23, slightly off the two-week high hit in the previous session.
 “It’s so natural that after five rally days you’re going have bit of a breather, so I wouldn’t be surprised if we see some pressure today and some profit-taking,” said Paul Gardner, partner and portfolio manager at Avenue Investment Management.
 Positive quarterly reports from Britain’s top two banks, HSBC (HSBA.L) and Barclays (BARC.L), limited declines in the index’s weighty banking sector and partly offset the resources-led fall.
 The British banks signaled bad debts may be past their peak, with HSBC declaring the first drop in U.S. consumer finance impairments in three years. For more see [ID:nLA635993].
 Royal Bank of Canada (RY.TO) was among top gainers, rising 0.6 percent to C$56.80, after UBS raised its rating on the country’s biggest bank to “buy” from “neutral”.
 Cossette Inc KOS.TO, Canada’s largest home-grown advertising agency, rose 33 percent to C$7.78. It said it will sell itself to private eqyity firm Mill Road Capital, spurning a bid from Cosmos Capital. [ID:nN10304881]
 ($1=$1.05 Canadian)  (Editing by Peter Galloway)                                      

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