April 14, 2009 / 8:50 PM / 10 years ago

CANADA STOCKS-TSX falls on oil after hitting 3-month high

* Seven of 10 groups up, but energy group drops 2.1 pct

* Decline follows five-week TSX rally (Adds comments and details; updates closing numbers)

By Ka Yan Ng

TORONTO, April 14 (Reuters) - Toronto’s main stock index fell on Tuesday after hitting a three-month high earlier in the day as lower oil prices pulled down the heavily weighted energy sector.

Seven of the TSX’s 10 subindexes posted small advances, but it was not enough to offset the 2.1 percent drag from the energy group. Industrials and telecoms both fell more than 1 percent.

Oil is a key Canadian export and its price often dictates direction for the TSX index’s energy component. It slipped below $50 a barrel on Tuesday on demand and inventory forecasts. [ID:nSP458479]

Shares of EnCana (ECA.TO), Canada’s biggest energy company, fell 3.2 percent to C$54.47 and were the biggest drag on the overall index. Suncor Energy (SU.TO) shares dropped 4 percent to C$30.70.

The S&P/TSX composite index .GSPTSE fell 54 points, or 0.58 percent, to finish at 9,231.62. The index had earlier reached 9,330.61, its highest level since Jan. 7.

The slide in the TSX did not spur much concern among market watchers as the index entered the session up 24 percent from the multi-year low hit in early March.

“We’ve just got a little profit-taking because Canada had been on a nice run for the past few days and weeks,” said Bruce Latimer, trader at Dundee Securities. “But the earnings in the U.S. are the focus here, that’s driving New York and Canada is just following along.”

U.S. equities also dropped, pulled down by data that showed an unexpected drop in U.S. retail sales as the market awaited the onslaught of quarterly corporate earnings in the coming weeks. [ID:nN14439273]

The heavily weighted financials index offset some of the TSX’s weakness, up 0.15 percent after news that U.S. investment bank Goldman Sachs (GS.N) reported a profit that was higher than expected late on Monday. [ID:nN13387020]

$1=$1.21 Canadian Additional reporting by Frank Pingue; editing by Peter Galloway

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