* TSX ends down 70.69 points, or 0.5 pct at 12,908.89
* Nine of 10 main groups finish lower
* Gold slides despite risk-aversion theme (Updates to close, adds details, quotes)
By Claire Sibonney
TORONTO, June 24 (Reuters) - Toronto’s main stock index ended lower on Friday as gold and energy issues fell and worries persisted that Greece might not pass the austerity measures necessary for the country to get more bailout funds.
Spot gold prices dropped below $1,500 an ounce for the first time in over a month, weighed down by a U.S. dollar rally, technical selling and accelerated losses in the equity and crude oil markets. [GOL/]
Goldcorp (G.TO) was the most influential decliner, dropping nearly 3 percent to C$46.24. The gold-mining subsector lost 1.7 percent, while the materials group, home to mining companies, fell 0.9 percent, despite a nearly 1 percent rise among base-metal issues.
John Kurgan, senior market strategist at commodity futures brokerage Lind-Waldock, said many investors were surprised to see the decline in gold amid the risk aversion theme in the market on Friday.
“I think people just have a little bit more faith in the U.S. dollar and you’re getting that risk-off type mentality as people are coming into the U.S. dollar and coming into U.S. government debt,” he said. “What’s getting hurt are the precious metals, gold specifically, more than silver even.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 70.69 points, or 0.54 percent at 12,908.89, with nine of its 10 main sectors weaker. Telecoms rose 0.3 percent.
The TSX index ended the week 0.9 percent higher.
The energy sector was down 0.8 percent even as U.S. crude oil eked out a slight gain on Friday. A surprise announcement that the International Energy Agency would release 60 million barrels of government-held stocks had sent oil prices into a 6 percent selloff in the previous session. [O/R]
Kurgan said investors were still concerned over the price action in oil on Thursday, despite prices stabilizing.
“Oil prices may be down here for a while,” he added.
“There just seems to be that effort by these 28 different countries to keep the oil price down to help the world economic recovery and so, facing that headwind, why buy oil stocks? You sold it yesterday, upon reflection today I think you probably had more liquidation.”
Canadian Natural Resources (CNQ.TO) was the second heaviest decliner, sliding 1.6 percent to C$38.26. Smaller oil and gas producer Niko Resources (NKO.TO), down 3.2 percent at C$62.85, agreed to plead guilty to charges of bribing a Bangladeshi public official. [ID:nN1E75N02B]
Concern over commodity prices and the resolution of Greece’s debt crisis trumped better than expected data on U.S. durable goods orders and German sentiment. [MKTS/GLOB]
“The situation in Europe is probably the primary thing that’s pervading market sentiment these days,” said Michael Sprung, president at Sprung & Co. Investment Counsel.
“I’m not sure that’s going to have a quick resolution. But I think that’s the first of several worries. Just the idea that the economy is slowing down,” he said, noting volumes were light.
On the bright side, copper prices rose 1 percent on optimism over Chinese demand and positive economic data. [MET/L
First Quantum Minerals (FM.TO) was the most influential advancer on the index, jumping 3.1 percent to C$127.40.
Sino-Forest TRE.TO dropped close to 11 percent to C$2.60, further melting down as questions arose about the lack of regulatory intervention after the forestry company was accused of fraud. [ID:nN1E75M0K0]
Shares of TMX Group edged 0.2 percent lower to C$45.20 amid continued uncertainty over the success of rival bids to acquire the stock exchange operator.
A Canadian offer to buy TMX may have the regulatory edge over a friendly bid by London Stock Exchange (LSE.L). [ID:nN1E75N162]
($1=$0.99 Canadian) (Additional reporting by Solarina Ho; editing by Rob Wilson)