July 10, 2009 / 9:24 PM / 10 years ago

CANADA STOCKS-TSX falls as Potash Corp shares hit hard

* TSX down 0.27 pct at 9,747.13, marks 2nd weekly decline

* Materials sector declines 2.12 percent

* Potash, Agrium shares fall on India contract news (Adds details, comments)

By Ka Yan Ng

TORONTO, July 10 (Reuters) - Toronto’s main stock index finished lower on Friday, but off session lows, as falling prices for oil and metals kept pressure on the resource-heavy index and shares of Potash Corp POT.TO were hit hard by pricing reports.

Potash Corp stock was the biggest drag on the index, down 8.9 percent at C$99.12, after fertilizer trade publications reported that India had settled some of its 2009 potash contract order with Russian producer Silvinit SILV.RTS at a price sharply below market expectations. [ID:nN10522755]

Agrium AGU.TO, another fertilizer producer, lost 4.7 percent to C$42.10.

The index’s mining-heavy materials sector dropped 2.12 percent, hurt by Potash, and as prices for gold and other metals were pressured by lingering concerns about the speed of the economic recovery.

The energy sector also weakened, declining 0.08 percent, as the price of oil fell below $60 a barrel.

“Here in Canada we also had weakness in gold early in the day,” said Bob Gorman, chief portfolio strategist at TD Waterhouse. “It’s not as soft as it was but nonetheless it’s down. That adds a little bit more pressure in Toronto that you wouldn’t see south of the border.”

The S&P/TSX composite index .GSPTSE closed down 26.79 points, or 0.27 percent, at 9,747.13. It fell more than 1 percent early in the day.

Six of the index’s 10 main groups were lower.

The index slid 5.2 percent on the week, mostly due to tumbling commodity prices and doubts about economic recovery, and at one point it fell to its lowest level in nine weeks.

Jobs and trade data on Friday showed Canada still mired in recession at the middle of the year and virtually guaranteed that the Bank of Canada would keep interest rates at rock bottom until mid-2010. [ID:nN10508481]

But analysts said the data had only a modest impact on the TSX. Statistics Canada said net job losses in June totaled 7,400 and the unemployment rate rose to 8.6 percent from 8.4 percent in May. Statscan also said Canada posted its largest trade deficit on record in May at C$1.42 billion.

Looking ahead, Gorman said upcoming quarterly earnings were likely to be “viewed with a fair bit of trepidation”, while energy prices will continue to be a key focus.

Results from several Canadian media companies trickled in on Friday. Canwest Global Communications CGS.TO reported a bigger quarterly loss [ID:nBNG244923], while Cogeco Inc (CGO.TO) posted an 11 percent increase in profit. [ID:nN08395082]

$1=$1.16 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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