CANADA STOCKS-TSX falls to 2-1/2-week low as banks drag

Mon Feb 4, 2013 4:39pm EST

* TSX ends down 51.21 points, or 0.4 percent, at 12,717.62
    * Nine of 10 sectors weaker, BlackBerry jumps 15 pct

    By Claire Sibonney
    TORONTO, Feb 4 (Reuters) - Canadian shares slumped to their
lowest level in 2-1/2 weeks on Monday, led by financial stocks,
after political uncertainty in Spain and Italy reminded
investors that there were still many risks ahead for the euro
zone.
    Rising Spanish and Italian bond yields renewed worries about
the euro zone crisis after Spain's prime minister faced calls to
resign over a corruption scandal, while a probe of alleged
misconduct involving an Italian bank was expected to widen three
weeks before a national election. 
    Banks were the biggest drag on Canada's main stock index.
Toronto-Dominion Bank slipped 0.7 percent to C$82.96 and
Royal Bank of Canada was down 0.5 percent to C$62.21.
    "It seems like the EU issues have come to the forefront
after a long time, or certainly for the first time this year.
That's impacting the bank stocks," said Elvis Picardo,
strategist and vice president of research at Global Securities
in Vancouver.
    Market players also noted that the financial sector was up
more than 10 percent since November, prompting some investors to
take profits in a seasonally weak month for bank shares ahead of
quarterly earnings reports due later in February.
    "From a global perspective and from a North American
perspective ... all markets right now are overbought. It's time
for a short-term pullback," said Keith Richards, portfolio
manager and technical analyst at ValueTrend Wealth Management.
    Richards added that the country's big banks were
encountering significant technical resistance after a recent
rally that took the index of Toronto's financial services stocks
 to its highest level since April, 2011.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 51.21 points, or 0.4 percent, at 12,717.62.
The index hit an intraday low of 12,668.81, its softest level
since Jan. 17.
    Nine of the 10 sectors were weaker, including energy and
materials, dragged down by a drop in commodity prices.    
    On the upside for the TSX, technology shares rose 3.3
percent, led by a rebound in BlackBerry.
    BlackBerry was the most influential advancer in early
trading, jumping 15.2 percent to C$14.99 after Bernstein
Research said it was upgrading the stock to "outperform"
following last week's launch of the company's new line of
smartphones.
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