March 24, 2010 / 9:01 PM / in 8 years

CANADA STOCKS-TSX dives back below 12,000 as commodities sag

* TSX falls 0.68 percent to 11,962.97

* Materials, energy sectors lead slide

* Strong U.S. dollar weighs on commodity prices (Updates to close, adds details, quotes)

By Claire Sibonney

TORONTO, March 24 (Reuters) - Toronto’s main stock index closed lower on Wednesday after two sessions of gains, slipping back below the 12,000 mark as the market came under pressure from a stronger U.S. dollar and falling commodity prices.

The index’s powerhouse gold stocks led the way lower, with Barrick Gold (ABX.TO), the world’s biggest gold producer, falling 3.3 percent to C$38.15, and Goldcorp Inc (G.TO) dropping 3.3 percent to C$38.23.

Gold slid to a six-week low as the greenback rose more than 1 percent versus the euro, with a ratings downgrade of Portugal and persistent worries over debt-laden Greece weighing on the euro ahead of a European Union summit on March 25-26. [GOL/] [ID:nLDE62N14Y] [FRX/]

Sources told Reuters Germany and France were still discussing whether to involve the International Monetary Fund in any standby aid mechanism for Greece, and what form any additional contribution by euro zone states might take.

“It looks like the IMF may have a part in any sort of bailout, so I think that’s making a few people nervous,” said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 81.57 points, or 0.68 percent, at 11,962.97, with nine of its 10 main groups lower.

Prices for oil and base metals also fell as the U.S. dollar surged on its safe-haven appeal. The TSX’s materials and energy sectors dropped 2.4 percent and 0.7 percent respectively. [O/R] [MET/L]

Shares of Suncor Energy Inc (SU.TO), Canada’s largest oil company, were down 0.6 percent at C$31.20, while Ivanhoe Mines (IVN.TO) dropped 1.7 percent to C$16.61.

“The U.S. dollar is very bid ... so of course that puts pressure on oil, gold, the commodity stocks,” said Paul Gardner, partner and portfolio manager at Avenue Investment Management.

Healthcare issues continued to rally two days after a landmark bill to overhaul the U.S. healthcare system brought relief to investors, boosting the sector 1.4 percent.

Fund manager AGF Management Ltd (AGFb.TO) reported stronger quarterly earnings on Wednesday as revenue and assets under management rose due to improvements in global financial markets. AGF shares rose 1 percent to C$18.77.

Drugmaker Aeterna Zentaris Inc AEZ.TO rose 3.6 percent to 87 Canadian cents after it said it returned to a fourth-quarter profit, benefiting from higher licensing fees and lower research expenses. [ID:nN24137944]

$1=$1.025 Canadian Additional reporting by Jennifer Kwan; editing by Rob Wilson

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