May 23, 2008 / 3:01 PM / 11 years ago

UPDATE 1-Toronto stocks slide as profit-taking hits oils

(Updates to midmorning)

*Index drops

*Energy shares fall amid profit-taking

*Shares of gold producers gain with gold prices

TORONTO, May 23 (Reuters) - The Toronto Stock Exchange’s main index was lower on Friday morning as energy shares fell on profit-taking despite a rally in commodity prices.

After initially giving the benchmark some support, resource shares edged down, led by the oil and gas sector. Suncor Energy (SU.TO) was off C$1.04, or 1.5 percent, to C$69.79, while the energy sector as a whole slipped 0.7 percent, even though oil prices moved higher.

Gold producers benefited from strengthening bullion prices. Agnico-Eagle Mines (AEM.TO) added 88 Canadian cents, or 1.3 percent, to C$71.20, and Goldcorp (G.TO) rose 93 Canadian cents, or 2.3 percent, to C$42.22, with the subindex adding 1 percent.

The S&P/TSX composite index .GSPTSE was down 53.53 points, or 0.36 percent, at 14,738.83 in the morning with half of its 10 main sectors in negative territory.

Paul Taylor, chief investment officer at BMO Harris Investment Management Inc, said the market had a quieter tone to it than on Thursday, when a court ruling stoked fears that the buyout of BCE Inc (BCE.TO) may not happen.

“It’s still the tail-off of the BCE scuttlebutt,” said Taylor. “It looks like that still is not going to end up being decided any time soon.”

“We’re sort of sitting back and catching a breath,” said Taylor.

Shares of BCE edged up 41 Canadian cents, or 1.3 percent, to C$33.05 after being hammered by investors on Thursday.

On the downside, TSX Group (X.TO), operator of the Toronto Stock Exchange, fell C$1.76, or 3.9 percent, to C$43.04 after Merrill Lynch downgraded its rating.

Fertilizer companies Potash Corp of Saskatchewan POT.TO and Agrium AGU.TO also dragged. Potash was down C$6.16, or 3.1 percent, at C$190.64, while Agrium slid C$3.27, or 3.9 percent, to C$80.68. The materials sector, which houses resource shares, was down 0.7 percent. ($1=$0.98 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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