October 25, 2011 / 12:42 PM / 6 years ago

TSX closes lower on euro zone rescue doubts

TORONTO (Reuters) - Toronto’s main stock index ended moderately lower on Tuesday, giving up earlier gains that took it to a one-month high, as pessimism set in over an upcoming European summit.

<p>Skyscrapers loom over a flagpole carrying the Canadian flag in the financial district in Toronto, March 11, 2009. REUTERS/Mark Blinch</p>

World stocks stumbled after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe’s debt crisis.

“The decline we’re seeing in the markets broadly may reflect some disappointment yet again that Europe is not going to be a quick fix,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 52.53 points, or 0.43 percent, at 12,109.75.

The index at one point reached 12,230.82, its strongest level since September 20.

“We’ve had a pretty good rally anticipating a positive outcome (from the European meetings), which I don’t think will be as neat and clean as politicians are wont to do,” Paul Hand, managing director at RBC Capital Markets, said early in the session.

After being up for most of the day, 8 of the TSX index’s 10 main sectors finished lower, with energy and financials leading the charge.

Canadian financial shares have frequently moved in sympathy with their European peers, which have see-sawed on developments in the European debt crisis. Toronto-Dominion Bank was the market’s biggest laggard, falling 1.7 percent to C$73.68.

Gold miners were among Toronto’s most heavily weighted gainers. Bullion prices roared to one of the biggest one-day rallies in years, as the euro zone jitters and gloomy U.S. consumer data rekindled a dormant safe-haven bid and triggered a flurry of technical buying.

Barrick Gold Corp closed up 3.4 percent at C$48.05. Goldcorp Inc gains 4.1 percent to C$48.34.

Miner Alacer Gold Corp’s shares rose 5.5 percent to C$11.56 a day after the company’s board approved expansion of its South Kalgoorlie gold operations in Australia.

Meanwhile, Potash Corp shares fell 2.5 percent to C$49.21 on news its competitor, Russian miner Uralkali, announced plans to boost capacity 80 percent by 2021.

On the Canadian earnings front, Canadian Pacific Railway slipped 0.5 percent to C$59.52 after the country’s No. 2 railway reported a lower third-quarter profit as fuel costs rose 43 percent.

In other news, the Bank of Canada held its key interest rate steady, dropping any mention of the need to raise rates as it slashed its growth and inflation projections.

Editing by Jeffrey Hodgson

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