* TSX down 0.36 percent at 11,668.17
* Resource groups pressured by retreating commodity prices
* Potash remains buoyed by hopes of richer offer
* Canada July inflation tame (Adds details)
TORONTO, Aug 20 (Reuters) - Toronto’s main stock index fell broadly on Friday morning, tracking equity markets around the world as jitters lingered about a faltering global economic recovery.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 42.01 points, or 0.36 percent, at 11,668.17, paring a decline of nearly 1 percent in the early going. Eight of the index’s 10 main groups were lower, with the energy and materials sectors down sharply on retreating commodity prices.
Michael Sprung, president of Sprung & Co Investment Counsel, said the weakness continued from Thursday with the general malaise in the U.S. economy depressing investor sentiment after data showed a tepid labor market and a contraction in regional factory activity.
The price of oil dropped to a six-week low below $74 a barrel, which weighed on key energy issues such as Suncor Energy (SU.TO), off 1.4 percent at C$32.53, and Canadian Natural Resources (CNQ.TO), down 1.7 percent at C$33.42.
The index’s materials group, home to golds and fertilizer producer Potash Corp, was down 0.27 percent. Some gold-mining issues, which have shone in recent sessions, were weaker on Friday as the price of gold slid below $1,230 an ounce. Goldcorp (G.TO) was off 0.66 percent at C$43.52, while Yamana Gold (YRI.TO) dipped 0.09 percent to C$10.55. Barrick Gold (ABX.TO) bucked the trend, rising 0.41 percent to C$46.86.
But takeover target Potash Corp of Saskatchewan POT.TO remained buoyed by hopes that a sweeter offer will emerge. Potash Corp, up 0.5 percent at C$155.70, is soliciting alternative bidders willing to pay more than the $130 a share offered by BHP Billiton (BHP.AX), the world’s largest mining company, in its $39 billion hostile offer. [ID:nN22340110]
“The fact that (Potash Corp) hasn’t changed and some of the other material stocks have been going down shows that people are still expecting there could possibly a higher bid coming along here,” Sprung said.
“Now we know we have 60 days, though I would suspect if there are other players out there, they won’t want to show their hand too soon.”
In Canadian economic news, a spike in energy costs and a new consumption tax in some provinces pushed up consumer prices in July, but inflation remained below target and was unlikely to add pressure on the Bank of Canada to hike interest rates. [ID:nN20500487]
$1=$1.05 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway