* TSX down 0.74 of a point to 11,957.37
* Financials, energy lead index lower
* Materials up 1.6 percent
(Adds details, quotes)
By Claire Sibonney
TORONTO, March 26 (Reuters) - Toronto’s main stock index ended little changed on Friday as the sinking of a South Korea naval vessel stoked worries about geopolitical tensions in Asia, offsetting growing confidence over a deal for debt-ridden Greece.
News of the ship sinking with more than 100 people on board stirred fears of the possibility of a military confrontation, even though Seoul said it was not clear if North Korea was involved. [ID:nSGE62P0GW]
The incident stymied the market just as positive sentiment was building around an agreement that would provide a safety net for Athens as it struggles to cut a giant budget deficit. [ID:nLDE62P0J3]
Gold stocks like Barrick Gold Corp (ABX.TO) rose along with prices for the safe-haven metal, while financial issues such as Royal Bank of Canada (RY.TO) slipped.
“There’s always something in the world that is going to spook the markets, no matter if the markets are expecting it or not,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished 0.74 of a point, or 0.01 percent, lower to 11,957.37. The index ended the week flat at 0.1 percent higher.
“It just seems to me as if investors are looking for excuses to take some of their profits,” said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
“The underlying tone is still quite healthy, but given that we’ve come up quite substantially from last month’s lows, I think investors are a little trigger happy,” he added.
The heavily weighted financial sector was hit as Royal Bank, the country’s biggest lender, retreated 0.9 percent to C$59.82, after hitting its highest point since 2007 earlier in the day at C$60.55.
Bank of Nova Scotia (BNS.TO) was down 1.5 percent to C$51.05. and Toronto-Dominion Bank (TD.TO) lost 0.7 percent to C$76.00.
“I think we’re taking a pause here, but we’ve had a very strong run in the financials,” said Nakamoto.
“People see the strong dividend yields, strong capital appreciation. I think they’re just sort of waiting for provisions to increase dividends, maybe early next year.”
The powerhouse energy sector was down 0.2 percent, with Suncor Energy Inc (SU.TO), the country’s largest oil company, down 0.1 percent to C$30.85, and natural gas major Encana Corp off 0.7 percent to C$30.35.
Oil prices fell below $80 after data showed the U.S. economy grew less than expected last quarter, and the plan to bail out Greece failed to quell concern over fragile economic recovery. [O/R]
Eight of the 10 sectors were lower, but materials issues rose 1.6 percent, reflecting firmer gold prices and copper at a two-week high. [GOL/] [MET/L]
Barrick (ABX.TO), the world’s biggest gold producer, gained 2.1 percent to C$38.42, while base metals miner First Quantum Minerals (FM.TO) added 1 percent to C$90.72.
Nakamoto said markets are awaiting next week’s U.S. March nonfarm payrolls data for further guidance on the state of the economy.
“It still seems to be that we need some sort of conversation that when the public sector stimulus wears off that private sector is going to have enough growth to pick up that slack. And I still think that’s focused on job creation in the U.S.,” he added.
Payrolls are expected to have increased in March, which would mark only the second time since the recession started in December 2007. [ID: nN26140498]
In Canada, the release of the January GDP report will be the main item on the country’s economic calendar. ($1=$1.03 Canadian)