CANADA STOCKS-TSX ends lower as banks, railways and RIM drop

Fri Sep 21, 2012 5:21pm EDT

* TSX closes 25.65 points, or 0.21 pct, lower at 12,383.60
    * RIM falls more than 7 pct after service outage
    * Nervousness leads to late sell-off
    * Bullion and crude prices help gold miners, oil stocks
    * U.S. Fed feel-good factor still evident

    By Alastair Sharp
    TORONTO, Sept 21 (Reuters) - Canada's main stock index ended
lower on Friday after a sharp late sell-off, with financial and
industrial stocks weighing, and Research In Motion 
falling more than 7 percent after a BlackBerry service outage.
    Miners, utilities and oil companies rose on a rebound in
crude oil and bullion prices but the rest of the Toronto Stock
Exchange's main sectors slipped as investors displayed a case of
end-of-the-week nerves.
    "It's remarkable how low the volumes are these days and no
one wants to be long or exposed over the weekend," said Gavin
Graham, president at Graham Investment Strategy, citing jitters
over potential shock events such as military strikes in the
Middle East.
    "In the event something happens in Iran or some other
potential black swan...if something were to happen the liquidity
is just not there," he said.
    Royal Bank of Canada was the single biggest weight
on the index, down 1.3 percent at C$55.99. Canadian National
Railway Co continued a fall started on Thursday, ending
down 1.6 percent at C$86.02. 
    The Toronto exchange's S&P/TSX composite index 
ended down 25.65 points, or 0.21 percent, at 12,383.60. The
index traded in positive territory for all but the last minutes
of the session. It fell 0.9 percent in the week.
    "The biggest problem is that there's a lethargy by investors
at this stage," said Ron Meisels, technical analyst and
president of Phases & Cycles in Montreal. "For the long term,
this is fantastic because if we had euphoria and contentment and
belief, then I would have to turn bearish immediately." 
    Banks and real estate investments trusts were undermined by
worries that central banks seemed willing to pump almost
unlimited stimulus money into the global economy to bolster
growth.
    But recent central bank stimulus measures have proved a
windfall for Canada's resource stocks, particularly gold miners,
which gained 0.6 percent as a group on Friday and are up more
than 16 percent in the past month.
    "The helicopters are flying to the rescue," Graham said.
"That means people are jumping on the risk-on trade, and by the
way, they've underperformed by a mile, and gold itself is
running, so therefore there ought to be some catch up by the
gold miners."
    Major producer Goldcorp Inc led the charge, gaining
0.8 percent to C$45.76, and Barrick Gold Corp added 0.5
percent to C$41.62 as the precious metal rose above $1,780 an
ounce for the first time since late February.
    Expectations that easier monetary policy would boost
liquidity, keep long-term interest rates low, and stoke
inflation fueled bullion buying. 
    Shares in Research In Motion fell 7.4 percent to
C$6.25 - just one cent shy of their lowest level since 2003 -
after the company suffered service problems in Europe, just as
rival Apple Inc started selling its new iPhone around the world.
 
    Oil companies gained, with Crescent Point Energy Corp
 up 4.4 percent to C$45.70 and Canadian Natural
Resources adding 0.5 percent to C$32.24, as concerns
about crude supplies boosted the price of oil even as lackluster
global economic growth kept demand subdued. 
    Investors said the feel-good effects of the U.S. Federal
Reserve's stimulus moves last week were still present in the
market, and that it would take a major negative shock to offset
that.
    "We had the wedding last week, opened the presents, and now
the couple is on their honeymoon," said Baskin Financial
portfolio manager Barry Schwartz. "There is not a lot of news to
focus on until they're back from the honeymoon."
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