TORONTO: Canada's main stock index fell to its lowest point in nearly a month on Monday as investors reconsidered their initial relief over a bailout deal for Cyprus, while shares of BlackBerry dropped 4.5 percent after a downgrade by Goldman Sachs.
Stocks initially rose after Cyprus reached a deal with international lenders for a 10 billion euro ($13 billion) bailout, averting a collapse of its banking system.
But sentiment quickly soured on concerns the terms of the deal - which will inflict heavy losses on uninsured depositors - could be applied in resolving other euro zone banking problem.
Economically-sensitive resource stocks were hit hardest in spite of mixed commodity prices, but the selling was also broadly based, with all 10 TSX subgroups retreating.
"Obviously the problems in Europe are not over. We're not seeing a resolution to it anytime soon," said Arthur Salzer, executive director and chief executive officer of Northland Wealth Management.
The heavily weighted energy sector dropped 0.76 percent, extending its recent drop from four-month highs hit last week. Oil prices edged higher on Monday, but have steadily weakened since mid-February.
Talisman Energy fell 1.4 percent to C$12.15, while AltaGas Ltd retreated 3.2 percent to C$34.90 after the energy infrastructure company said it would buy US power company Blythe Energy LLC..
Among individual movers, BlackBerry fell 4.5 percent to C$14.51, building on its 8 percent drop on Friday following a disappointing US launch for its new Z10 smartphone.
Goldman Sachs downgraded the company's shares on Monday, citing concerns over "a lack of marketing support and poor positioning for the product."
All told, the S&P/TSX composite index fell 76.64 points, or 0.6 percent, to finish at 12.680.71, hitting its lowest level since Feb 27.
The materials sector fell 1.44 percent, led by gold stocks, as the price of the precious metal slumped as investor appetite for safe haven assets fell sharply after the Cyprus deal.
Yamana Gold fell 3.3 percent to C$15.47, while Kinross Gold dropped 3.4 percent to C$8.04.
"Gold is probably going to consolidate further before going higher," said Salzer.
Base metals miners were also on the defensive, as copper miner First Quantum Minerals retreated 3.5 percent to C$19.41 and Thompson Creek Metals fell 3.7 percent to C$3.11.
Financial stocks eased 0.26 percent, led by life insurers Manulife Financial, which sank 1.6 percent to C$14.97, and Sun Life Financial, which dropped 1.6 percent to C$27.53.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
Comments
Comments are closed.