CANADA STOCKS-TSX falls on oil data, fading Greek optimism

Wed Feb 8, 2012 1:00pm EST

* TSX down 12.31 points, or 0.1 percent, at 12,500.11

* Energy shares weigh on index

* U.S. crude surplus hurts oil prices

* Greek deal optimism fades

* Canadian Jan housing starts beat expectations

By Jon Cook

TORONTO, Feb 8 (Reuters) - Canadian stocks were lower on Wednesday with energy shares taking a hit from a report that showed U.S. crude inventories rose last week and overall sentiment weakening as the outcome of Greek debt negotiations remained in flux.

Oil and gas shares fell after data from the U.S. Energy Information Administration showed oil inventories rose, which countered news of a large drop reported by industry body American Petropleum Institute (API) on Tuesday.

Oil company Canadian Natural Resources led losses, falling 1.4 percent to C$37.98.

At 12:31 p.m. (1731 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 12.31 points, or 0.1 percent, at 12,500.11. Early in the day it rose as high as 12,575.15, above its 200-day moving average of 12,560.94.

The slide in oil erased early momentum from reports of a pending agreement in talks between Greece and the European Union on austerity measures needed to secure a 130 billion euro ($172 billion) rescue package for Greece.

The more positive Greek tone had been welcomed by Canadian banks and mining shares, which have risen this year as commodities rallied on the brightening euro zone outlook. But both reversed course as a deal remained elusive.

Brookfield Asset Management led financial shares lower, dropping 1.3 percent to C$31.24.

Teck Resources, down 1.2 percent at C$41.10, led losses for the mining sector, which has risen more than 12 percent this year.

Goldcorp fell 1 percent to C$47.13 after Canadian securities regulators on Tuesday implicated company Chairman Ian Telfer in an alleged insider trading scheme, saying he helped the main defendant in the case disguise her illegal trading activities. Telfer denied the charge.

"That may be a bit of an overhang on the stock relative to the group as a whole," said John Hughes, senior analyst at Desjardins Securities.

Agrium Inc defied the downward move, climbing 1.2 percent to C$82.08 after it reported a 43 percent rise in fourth-quarter net profit on Wednesday.

Shares of WestJet Airlines Ltd rose nearly 4 percent to C$13.68 after Canada's second-largest carrier said its quarterly earnings dipped in the fourth quarter but the result topped expectations.

Empire Co Ltd's shares fell 0.7 percent to C$ 55.86 after Canada's No. 2 grocer said the chief executive of its Sobeys Inc grocery store chain will retire in the spring because of a health problem.

Also on Wednesday, Canadian housing data showed starts declined in January from December, but were still above expectations.