May 21, 2010 / 2:58 PM / 9 years ago

CANADA STOCKS-Bargain-hunting helps TSX pare early losses

* TSX down 0.62 percent at 11,334.98

* Falls nearly 2 pct early on, lowest since Feb. 9

* Eight of 10 sectors lower (Adds details)

By Ka Yan Ng

TORONTO, May 21 (Reuters) - Toronto’s main stock index recovered much of its near-2 percent drop on Friday as bargain hunters emerged after a six-day slide brought on by Europe debt woes and the outlook for global economic growth.

The index fell sharply to a 14-week low shortly after the open, deepest in the resources groups due to weak commodity prices, and in line with sliding global markets. [MKTS/GLOB]

But the TSX dramatically cut its losses as both the materials and energy sectors clawed back from more than 1 percent losses. Materials were up 0.36 percent, while energy was off 0.03 percent.

Teck Resources TCKb.TO rose 4 percent to C$33.25, while Talisman Energy TLM.TO gained 0.53 percent to C$17.03, and First Quantum Minerals (FM.TO) advanced 2.9 percent to C$62.20.

Weak spots were found among some banking and gold issues. Royal Bank of Canada (RY.TO) fell 1.1 percent to C$58.05, while Barrick Gold (ABX.TO) fell 1 percent to C$43.37.

BlackBerry maker Research in Motion RIM.TO dropped 2.3 percent to C$64.42.

At 10:32 a.m. (1432 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 70.97 points, or 0.62 percent, at 11,334.98. Eight of the index’s 10 main groups were lower. At one point, all sectors had recorded losses greater than 1 percent.

“It’s due for a bounceback,” said Paul Gardner, partner & portfolio manager at Avenue Investment Management.

“When you look at the fundamentals of the equity market, and not taking into consideration sovereign debt crisis in Europe, it is getting cheap.”

Gardner said that while the European developments have clouded the mood on the markets, the North American economy has fared relatively well, particularly Canada where “the consumer is alive and well.”

Canadian consumers spent heavily on motor vehicles and parts in March, causing retail sales to jump 2.1 percent, the most in five years, data showed on Friday. [ID:nN21207192]

Inflation came in slightly higher than expected, keeping alive the possibility of a June interest rate hike by the Bank of Canada. [ID:nN21149251]

Canadian financial markets will be closed on Monday for Victoria Day. (Reporting by Ka Yan Ng; editing by Rob Wilson)

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