April 23, 2008 / 9:18 PM / 11 years ago

UPDATE 4-Profit-taking, resources drag Toronto stocks down

(Adds details, quotes)

By Leah Schnurr

TORONTO, April 23 (Reuters) - The Toronto Stock Exchange’s main index skidded nearly 200 points on Wednesday as falling bullion prices took the luster out of gold-mining stocks, and the energy sector was stung by profit-taking.

Shares of energy and resource companies led the way down, with Agnico-Eagle Mines (AEM.TO) sliding C$3.95, or 5.7 percent, to C$65.25 and Suncor Energy (SU.TO) giving up C$5.07, or 4.2 percent, at C$116.00.

Overall, the gold subindex shed 3.5 percent and helped take 3.2 percent off its larger materials sector, while bullion was pressured by the U.S. dollar’s rise.

The oil and gas sector gave up 1.8 percent as investors locked in profits after the recent steep advance of crude prices. Oil was up 23 cents at $118.30 a barrel amid a decline in gasoline stocks.

“I think you can fully expect some profit-taking,” said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd in Calgary. “It was quite a run-up the last month here.”

The S&P/TSX composite index .GSPTSE closed down 196.54 points, or 1.38 percent, at 14,069.80 with seven of its 10 main sectors in a downturn.

Also hurting the resource-laden materials group were declines by big fertilizer companies. Potash Corp of Saskatchewan POT.TO fell C$8.80, or 4.1 percent, to C$206.50, and Agrium AGU.TO sagged C$4.80, or 5.2 percent, to C$88.25 respectively.

Lundin Mining Corp (LUN.TO) fell 27 Canadian cents, or 3.5 percent, to C$7.50 after it said the projected cost of developing its Tenke copper-cobalt joint venture with Freeport-McMoRan Copper & Gold (FCX.N) has risen to about $1.75 billion, nearly double last year’s estimate.

Elsewhere, shares of Aastra Technologies AAH.TO were down C$4.16, or 13.8 percent, at C$26.00 a day after the business communications company reported a drop in first-quarter profit, due in part to weaker European sales.

Banking issues slipped 1 percent, caught up in continuing unease about the health of U.S. financial markets.

Canadian Imperial Bank of Commerce (CM.TO) was down C$1.55, or 2.2 percent, at C$68.40, while Royal Bank of Canada (RY.TO) dipped 52 Canadian cents, or 1.1 percent, to C$47.51.

“I think there’s still concerns that this whole credit crisis isn’t behind us and that a lot more is going to have to be done,” said Kerkovius.

“I think the market is sort of poised on the brink of a potential accident and what exactly the market is going to look at as being the next accident is hard to say.”

The Toronto benchmark has seen a strong rally in recent weeks, helped by hopes the credit crunch has turned a corner. The index remains up 5.4 percent for the month so far.

On the earnings front, Precision Drilling Trust PD_u.TO was off C$1.41, or 5.2 percent, at C$25.58 after it said its profit declined amid lower demand and prices.

Specialty metals producer Timminco TIM.TO was the most heavily traded issue on the TSX, rebounding from early losses to finish up C$3.37, or 18.5 percent, at C$21.60.

The company said it was unaware of any corporate developments to explain the recent volatility of its stock, which has dived by as much as 48 percent in the last week amid questions about its technology for purifying silicon used in solar power cells.

Market volume was 352 million shares worth C$7.1 billion. Decliners outpaced advancers 965 to 608. The blue chip S&P/TSX 60 index .TSE60 closed down 12.47 points, or 1.47 percent, at 835.71.

In New York, stocks were boosted by results from technology companies that showed the sector’s strength against an economic slowdown. The Dow Jones industrial average .DJI rose 42.99 points, or 0.34 percent, to 12,763.22, and the Nasdaq composite index .IXIC was up 28.27 points, or 1.19 percent, at 2,405.21.

$1=$1.02 Canadian Editing by Rob Wilson

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