May 12, 2009 / 9:28 PM / 9 years ago

CANADA STOCKS-TSX edges lower as financials drag

* TSX slips 0.16 pct to 10,094.12

* Golds shine, financials dull

* Index moves in wide range of 9,970.26 to 10,193.08 (Adds details, comments)

By Ka Yan Ng

TORONTO, May 12 (Reuters) - Toronto’s main stock index closed little changed on Tuesday as the hefty energy and financial groups lost ground, but were offset by strength in the mining-heavy materials group.

The S&P/TSX composite index .GSPTSE fell 16.44 points, or 0.16 percent, to close at 10,094.12 after a session made volatile as swings in oil prices shook energy shares. The index moved in a wide range, falling more than 1 percent to as low as 9,970.26 and rising more than 1 percent as high as 10,193.08.

The materials group held convincingly in positive territory all session, finishing up 4.12 percent, as the price of gold and other metals rallied. The gold price ended 1 percent higher as a weaker U.S. dollar and a bigger U.S. trade deficit bolstered the status of bullion as an alternative investment. [ID:nLB171894]

Gold miners were the key movers to the upside. Barrick Gold (ABX.TO) rose 3.75 percent to C$40.62, while Goldcorp (G.TO) gained 4.88 percent to C$39.31. Kinross Gold (K.TO), Agnico-Eagle (AEM.TO), and Yamana Gold (YRI.TO) were also among the top 10 advancers.

Fertilizer producer Potash Corp of Saskatchewan (POT.TO), part of the materials component, led all movers higher, rising 5.92 percent to C$117.29.

Apart from their brief charge at the start of the session, financials were the main drag as profit-taking continued after the sector’s massive rally since early March.

Royal Bank of Canada (RY.TO) was down 1.95 percent at C$43.29. Manulife Financial (MFC.TO) fell 2.75 percent to C$22.60.

Recent new stock offerings by U.S. banks also weighed as investors worried these new issues would dilute the value of existing shareholdings. Overall, financials fell 1.84 percent.

“The U.S. dollar is on the weak side and that’s sending gold higher. There’s profit-taking on the financial sector,” said Francis Campeau, a broker at MF Global Canada in Montreal.

The oil and gas group was the wild card, rising and falling in line with the movement in the price of crude. U.S. oil CLc1 rose to a six-month high above $60 a barrel on optimism of an economic recovery, but settled short of $59 a barrel.

Most big-name energy stocks were lower, which was enough to knock the sector down 0.36 percent. Petro-Canada PCA.TO shed 2.33 percent to C$43.92, while Suncor (SU.TO) dropped 2 percent to C$35.50.

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

Campeau said the silver lining of the day’s trading was that, despite the early deeper declines, the cash was not retreating to relatively safer assets.

“One positive is that it’s not like the flows coming out of stocks are (going) to bonds. The money is staying within stocks,” he said.

In earnings news, George Weston Ltd (WN.TO) reported a higher first-quarter profit, as it booked a big gain from the sale of a U.S. bakery business, and said it was still deciding what to do with the proceeds from its divestitures. [ID:nN12289835]

Weston stock rose 3.89 percent to C$65.99.

Rona RON.TO fell 6.98 percent to C$13.60 after the home-improvement chain reported a first-quarter loss on weak same store sales. [ID:nN12288076]

The blue-chip S&P/TSX 60 was off 0.21 percent at 611.76.

$1=$1.16 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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