December 31, 2007 / 10:06 PM / 11 years ago

UPDATE 3-Toronto stocks end 2007 with 7 pct gain on year

(Adds comments, details)

By Wojtek Dabrowski

TORONTO, Dec 31 (Reuters) - The Toronto Stock Exchange’s main index ended 2007 on a flat note on Monday, as buyers managed to keep the benchmark out of the red in a broad but insignificant move upward.

The S&P/TSX composite index .GSPTSE added 11.72 points, or 0.08 percent, to close at 13,833.06. On the final trading day of last year, it closed at 12,908.39, gaining 14.5 percent for 2006.

Monday’s year-end session gave the energy- and resource-skewed TSX composite a gain of 7.2 percent for 2007, though some commentators warned investors to exercise caution in celebrating too strongly.

“We could see this bull market sort of come to a halt,” said Elvis Picardo, investment strategist at Northern Securities Inc in Vancouver. “After five straight years of gains, we could see the TSX down ... marginally next year.”

On Monday, seven of the 10 main groups moved higher, but by relatively small amounts. The energy sector added 0.03 percent, while financials gained 0.26 percent. The resource-heavy materials group inched 0.05 percent lower.

The session’s net gainers included Cogeco Cable (CCA.TO), which rose C$1.42, or 3.1 percent, to close at C$47.81. Heritage Oil HOC.TO added C$1.23, or 2.4 percent to end at C$52.48.

BlackBerry maker Research In Motion RIM.TO finished the year lower, sinking C$2.24, or 2 percent, to C$112.56. Regardless, the stock has more than doubled this year.

The year saw investors grapple with the credit crunch that emerged in August following trouble in the U.S. subprime mortgage market. Problems in a part of the asset-backed commercial paper market also plagued Canada.

Picardo predicted that in 2008 liquidity issues will continue to weigh.

“The credit crunch was a really unexpected development,” he said. “Going into 2008, that still continues to be the biggest sort of overhang on the markets.”

Still, oil and gold — two key commodities that often steer the direction of the Toronto composite — posted strong double-digit gains during the year and could keep rising further, said Gavin Graham, chief investment officer at the Guardian Group of Funds in Toronto.

“It’s likely that we’re going to continue to see commodity prices remaining higher than people anticipate,” he said.

He noted that oil nearly hit $100 per barrel without any major hurricane- or Middle East-related disruptions to supply.

However, some observers have blamed speculators for driving up oil prices to artificially high levels.

Picardo said that speculative activity, as well as the credit crunch, have made the markets jittery, and will continue to generate volatility into 2008.

“Investors seem to have become much more nervous in recent months,” he said. “There’s a tendency to sell the rallies rather than buy the dips.”

In the United States, the year’s last session ended in the red for the Dow Jones industrial average, which fell 101.05 points, or 0.76 percent, to 13,264.82. The tech-heavy Nasdaq gave up 22.18 points, or 0.83 percent, to end at 2,652.28.

For the year, the Nasdaq jumped 9.8 percent outpacing the blue-chip Dow, which climbed 6.4 percent.

$1=$0.99 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson

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