December 14, 2007 / 10:22 PM / 11 years ago

UPDATE 3-Toronto stocks sag again to end losing week

(Adds comments, details)

By Cameron French

TORONTO, Dec 14 (Reuters) - The Toronto Stock Exchange’s main index fell modestly on Friday, capping off a losing week, as mining issues continued to slide, while U.S. inflation data dampened expectations of further interest rate cuts.

The S&P/TSX composite index ended down 73.02 points, or 0.53 percent, to close at 13,674.23. For the week, the index dropped 1.4 percent.

Metals producers, which have tumbled this week, continued to slide on the back of falling resource prices and concerns that a deeper economic slowdown could reduce demand.

“We’re getting pummeled in some of the resources today,” said Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp.

The TSX materials subgroup dropped 1.39 percent, the steepest decliner of the seven index subgroups that fell. Three groups ended the session higher.

Kinross Gold (K.TO), Canada’s No. 3 gold miner, fell 69 Canadian cents, or 3.8 percent, to C$17.50, while copper and zinc miner HudBay Minerals (HBM.TO) slid 67 Canadian cents, or 3.2 percent, to C$20.26.

The TSX financials group, which makes up about one-third of the index, eased 0.66 percent as stronger than expected U.S. inflation data fueled concerns that the U.S. Federal Reserve may stop cutting interest rates earlier than expected.

Canadian Imperial Bank of Commerce (CM.TO), one of several banks to reveal writedowns from exposure to the battered U.S. subprime mortgage market, fell C$2.99, or 3.9 percent, to C$73.60, while Bank of Montreal dropped C$1.62, or 2.7 percent, to C$58.11


While December is typically a strong time for the market, stocks have struggled of late, as worries about credit conditions and speculation about a recession in the United States have led to volatile price action.

Paul Hand, managing director at RBC Capital Markets said prices were also suffering from additional tax-loss selling, the year-end practice of selling underperforming stocks to claim the losses against income taxes.

“I think we’re seeing a delayed Santa rally,” he said.

“It’s been a challenging year for people, so people have more tax-loss selling candidates.”

Among top gainers, Thomson Corp TOC.TO rose 80 Canadian cents, or 2.1 percent, to C$39.06, after the electronic publisher said its controlling shareholder will reinvest 50 percent of its quarterly dividends in common shares during the first three quarters of 2008.

BCE Inc. (BCE.TO) fell early in the session, then recovered after saying it was not in talks to renegotiate the terms of its C$34.8 billion ($34.2 billion) buyout by a group of private equity investors.

BCE ended the session up 24 Canadian cents to C$38.60.

Market volume was 335.5 million shares, valued at C$5.9 billion. Declining issues outnumbered advancers 1,016 to 631.

The Dow Jones industrial average dropped 178.11 points, or 1.32 percent, to 13,339.85, while the Nasdaq composite slid 32.75 points, or 1.23 percent, to 2,635.74.

$1=$1.02 Canadian Reporting by Cameron French; Editing by Rob Wilson

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