* TSX drops 0.54 percent to 13,252.92
* Seven index sectors fall, resources drop the most
* Bernanke says Fed not ready to act yet (Adds details, background)
By Ka Yan Ng
TORONTO, July 14 (Reuters) - Toronto’s main stock index closed lower on Thursday with resource shares taking the biggest hit after U.S. Federal Reserve Chairman Ben Bernanke backed away from signaling that he was set to ease monetary policy.
Investors took cheer on Wednesday from Bernanke’s suggestion that the Fed was ready to inject more money into the U.S. economy if the situation was dire enough to warrant it. He stood by that assertion on Thursday, but added that the time had not yet come to do so, which deflated market hopes. [ID:nN1E76D0IG]
“The market basically took it negatively,” said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets. Mokhtari added that the U.S. debt ceiling impasse and the ongoing euro zone debt crisis were also weighing on sentiment.
Investors were also on edge after Moody’s put the United States’ Aaa credit rating under review late on Wednesday, while monitoring developments between the congressional Republicans and the White House over raising the statutory borrowing limit.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 72.02 points, or 0.54 percent, at 13,252.92. Seven of its 10 main sectors fell.
Chief decliners were in the influential energy and materials groups, down 0.56 percent, and 0.89 percent, respectively. Commodity prices turned lower after Bernanke’s comments, and gold-miners were unable to hold gains despite a record price hit by gold at $1,594.16.
Suncor Energy (SU.TO) fell 1.23 percent to C$37.60, while Barrick Gold (ABX.TO) dropped 1.3 percent to C$46.01. Teck Resources TCKb.TO fell 2.07 percent to C$48.70, and Talisman Energy TLM.TO shed 2.11 percent to C$18.05.
Analysts said it was still too early to definitively characterize the second-quarter earnings season. A few key U.S. bellwethers have reported, and Thursday’s stronger results from JPMorgan Chase (JPM.N) helped early investor sentiment.
A few Canadian corporations in the oil and media sectors reported earnings that were some of the bright spots in an overall declining market. The results calendar ramps up in a couple of weeks.
“Generally, across the board, it should be a strong quarter for the Canadian equity market for earnings,” said Paul Taylor, chief investment officer at BMO Harris Investment Management.
Two of Canada’s biggest media companies, Corus Entertainment (CJRb.TO) and Astral Media ACMa.TO, posted higher quarterly profits on Thursday, benefiting from strong growth in television subscribers and advertising. [ID:nN1E76D0AA]
Corus rose 1.69 percent to finish at C$21, but Astral fell 0.42 percent to C$37.69.
Nexen Inc NXY.TO gained 3.4 percent to C$21.89 after results topped estimates. The independent oil explorer also said it was ramping up drilling at its Long Lake oil sands project in northern Alberta in an effort to use the struggling operation’s processing plant more fully. [ID:nL3E7IE1U9]
Mokhtari said the index’s pullback now should not be a surprise after the Toronto market’s strong run through the end of June.
“Volume readings are not that significant on down days in Canada or the U.S. I would say it’s more of profit-taking, more of what you would call backing and filling. For the time being I wouldn’t read too much into it.”
($1=$0.96 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)