CANADA STOCKS-Banks drag TSX to 1-week low on Cyprus fears

Thu Mar 21, 2013 4:56pm EDT

* TSX falls 78.68 points, or 0.61 percent, at 12,747.87
    * Gold miners up 2 percent as gold price at 1-month high
    * Lululemon shares up 1.4 percent after results

    By John Tilak
    TORONTO, March 21 (Reuters) - Canada's main stock index fell
to a one-week low on Thursday as investor anxiety over the
threat of a debt default and banking meltdown in Cyprus spurred
weakness in financial and energy shares that a surge in
gold-mining stocks couldn't overcome.
    Stronger manufacturing data from China and the U.S. Federal
Reserve's recommitment on Wednesday to its ongoing stimulus
program prevented the fall from becoming steeper.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 78.68 points, or 0.61 percent, at
12,747.87, very close to its lowest level of the day and its
lowest point since March 14. 
    The crisis in Cyprus revived questions about the economic
health of the broader euro zone and brought into focus the risks
investors there must face.
    "It reinforces the piece that says the problems in Spain,
Portugal, Greece and other locations aren't going away in a
hurry," said Robert McWhirter, president and portfolio manager
at Selective Asset Management.
     The European Central Bank gave Cyprus until Monday to raise
billions of euros to clinch an international bailout or face
losing emergency funds for its banks. 
    "If this goes down to the wire, there is some risk to the
markets," said Stan Wong, vice president and portfolio manager
at Macquarie Private Wealth. "Being a little cautious and
holding some cash would make some sense."
    Financials, the index's weightiest sector, were down 0.8
percent. Royal Bank of Canada, the country's biggest
bank, slipped about 1 percent to C$60.74, and Toronto-Dominion
Bank fell 0.7 percent to C$83.67.
    A sharp fall in oil prices and a 2.5 percent decline in
Canadian Natural Resources Ltd to C$32.79 resulted in
the energy sector losing 1.1 percent.
    The industrials sector dropped 1.6 percent. Canadian
National Railway Co was down 2.5 percent at C$98.84.
    The Cyprus worries boosted the appeal of gold as a safe
haven and pushed the price of the precious metal to a one-month
high. 
    That helped the index's materials sector, which includes
mining stocks, gain 0.5 percent, with gold miners rising 2.2
percent. Barrick Gold Corp added 2.4 percent to
C$30.31, and Goldcorp Inc climbed almost 2 percent to
C$34.24.
    Lululemon Athletica Inc said it expected earnings
to drop in the current quarter, hurt by a recall of its workout
pants. It also reported results for the quarter ended Feb. 3
that came in slightly ahead of forecasts. Shares of the yogawear
retailer were up 1.4 percent at C$66.26.
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