CANADA STOCKS-TSX regains some ground, but Fed spurs big weekly loss

Fri Jun 21, 2013 5:30pm EDT

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* TSX ends up 27.09 points, or 0.23 percent, at 11,995.66
    * Falls 1.6 pct on week after Fed signals end to easy money
    * Six of 10 main index sectors rise

    By Solarina Ho and Alastair Sharp
    TORONTO, June 21 (Reuters) - Canada's main stock index ended
higher on Friday on gains in banks and gold miners, but recorded
its third straight week of heavy losses as the U.S. Federal
Reserve's signal of a coming pullback of its easy money policy
spooked investors.
    The change in Fed direction outlined on Wednesday sent
shockwaves through the financial system, with bond yields
spiking and global stock markets suffering a two-day plunge.
    Trading on Friday swung widely as markets sought to
stabilize. The Toronto index rose as high as 12,067.54 and at
one point fell to 11,935.72. 
    "We've been used to (the volatility). A fact of life for
markets today. We're going into a new environment and no one
likes uncertainty," said John Ing, president of Maison
Placements Canada.
    "The reality has set in that tighter money, higher rates are
in the offing. Unfortunately, we've not been able to address
some of the problems which prompted the easing, therefore, the
volatility," Ing said.
    The index's financial group edged up 0.1 percent on a
rebound in bank shares, but weakness among insurance companies
offset gains.
    Sun Life Financial slid 2.2 percent to C$30.19,
while Manulife Financial Corp declined 0.5 percent to
C$16.72. Among the banks, Toronto-Dominion Bank gained
0.8 percent to C$81.30, and Bank of Nova Scotia added
0.8 percent to C$55.83.
    The materials sector rose 1.3 percent as heavyweight gold
mining stocks Goldcorp Inc. and Barrick Gold Corp.
 both gained even though bullion had its sharpest weekly
drop in nearly two years.    
    "Our sense is the market is very jittery, very skittish, and
as a consequence they're looking more toward the short term,"
said Irwin Michael, a portfolio manager at ABC Funds. "On
balance our sense is that our market is a little oversold. The
latter part of yesterday was just pandemonium."
     The Toronto Stock Exchange's S&P/TSX composite index
 ended up 27.09 points, or 0.23 percent, at 11,995.66.
Six of the index's 10 main groups were positive. 
    Energy stocks dipped 0.03 percent on weaker oil prices, led
lower by TransCanada Corp's 's 2.2 percent fall to
C$46.00, and by Canadian Natural Resources, which fell
0.8 percent to C$29.37. Cenovus Energy Inc lost 0.9
percent to trade at C$29.58.
    Telecoms companies were well-represented at the top of the
table, with Rogers Communications Inc up 3.7 percent
at C$46.45 and BCE Inc up 1 percent at C$43.60.
    Canadian stocks, heavily weighted with resource companies
that depend on a growing world economy, might not bounce back
quickly from this week's Fed shock, some analysts said.
    "I don't think, when people look at the Toronto market and
they look at what drives it, that they are going to rush back
in" as the Chinese economy splutters and the greenback rises,
said Gareth Watson, vice president of investment management and
research at Richardson GMP. 
    "It has to do with that composition of the TSX index," he
said. The energy sector and the mining-heavy materials sector
together account for more than 38 percent of the index.
FILED UNDER:
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