January 22, 2010 / 10:31 PM / 9 years ago

CANADA STOCKS-TSX tumbles to six-week low on banks, oil

* S&P/TSX composite drops 1.1 percent to 11,343.43

* Financials, oils help drag TSX to six-week low

* Barrick, other gold producers rise (Adds details, comments)

By Ka Yan Ng

TORONTO, Jan 22 (Reuters) - Toronto’s main stock index slid to its lowest point in six weeks on Friday, roughed up by falling oil prices and by weaker financial issues that were still reeling from the White House plan to impose tighter restrictions on U.S. banks.

Heavy losses came from Royal Bank of Canada (RY.TO), down 2.44 percent at C$52.88, and Suncor Energy (SU.TO), down 1.81 percent at C$35.20.

“I think we’re just going to go through a period of a bunch of uncertainty as we see all this new policy try to be digested,” said Brian Pow, vice-president at Acumen Capital Partners in Calgary, referring to President Barack Obama’s plan as well as fears that recent bank lending curbs in China could slash demand for commodities and hamper the global recovery.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed lower for a third straight session, down 125.67 points, or 1.1 percent, at 11,343.43. All 10 of the index’s main groups were lower.

Gold prices bounced back from a one-month low, helping producers rise and chip into the heavy decline. At one point, the sector’s strength helped the TSX briefly limp into positive territory.

Gold miners, which have been under pressure over worries that Obama’s plans could curb investment flows into commodities, were the only significant heavyweight advancers on Friday.

They helped limit the overall materials group to a 0.26 percent fall. Barrick Gold (ABX.TO), the world’s largest producer, led the influential advancers with a 0.91 percent rise to C$38.66. Agnico Eagle (AEM.TO) followed with a 2.3 percent climb to C$56.97.

“A lot of times you’re going to see, when there’s uncertainty, people rush back to gold,” said Pow.

The TSX index sagged 2.9 percent on the week, its second consecutive weekly decline. Part of this week’s fall stemmed from fresh evidence of tightening credit policy in China, which brought up fears that it could cool the economy seen as the world’s growth engine.

But Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, said he viewed China’s moves as proactive steps to prevent excess cash that can fuel inflation and asset bubbles.

“The last thing you want to do is act after the fact. This is pre-emptive. It’s sort of like having a vaccine — it’s painful in the short-term but longer term it’s very healthy,” he said.

“The broader picture is still the economic recovery.”

Canadian retail sales data on Friday further confirmed that that recovery from recession was under way, even though the headline figure was disappointing, showing a drop in November from October. [ID:nN22227089]

$1=$1.06 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below