CANADA STOCKS-TSX down after Fed goes flexible; gold miners sink

Wed Mar 19, 2014 4:47pm EDT

* TSX ends down 0.24 percent at 14,334.04
    * Investors retreat after Fed meeting, dropped guideposts
    * Worries over Ukraine fade, hurting gold miners

 (Adds analyst comment after Fed; updates prices to close)
    By Alastair Sharp
    TORONTO, March 19 (Reuters) - Canada's main stock index
slipped on Wednesday after the Federal Reserve stuck with a
withdrawal of monetary stimulus and dropped a guideline for when
U.S. interest rates may eventually rise.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 34.94 points, or 0.24 percent, at
14,334.04. Half of its 10 main sectors were in the red.
    The reaction surprised Rick Hutcheon, president and chief
operating officer at RKH Investments, who said the move gave the
Fed more flexibility to react to numerous data points rather
than be locked into perhaps misleading employment numbers.
    "It's puzzling," Hutcheon said of the sharp fall in U.S.
stocks that was then replicated to a lesser degree north of the
border. "I would have thought it was market friendly."
    Canadian equity losses were felt most sharply in several
major gold-mining shares, which were already down on a
stabilization in the Ukraine crisis, but somewhat neutralized by
gains in Canadian Natural Resources and other oil and
gas stocks.
    "I like the Canadian energy sector a lot ... Its fate is
going to be determined by the recovery of the U.S. industrial
might. The Americans need our energy," Hutcheon said, adding
that western European countries were also looking to buy
Canadian gas as Russia takes over Ukrainian military bases in
Crimea.
    Banks and telecoms companies, both well-known dividend
plays, also featured in the list of top performers, with Rogers
Communications Inc up 1.3 percent at C$44.10 and Bank
of Montreal gaining 0.4 percent to C$72.63.
    Barrick Gold Corp fell 3.4 percent to C$21.78 and
Goldcorp Inc was off 2.7 percent at C$30, with the gold
miners falling with bullion prices on a mixture of Fed reaction
and an easing of anxiety over the Ukraine crisis. Worries about
Ukraine had recently added to gold's safe-haven appeal.
    "The Crimean situation has cooled down and nothing goes
straight up forever, so gold is having a bit of a pause here,"
said John Kinsey, a portfolio manager at Caldwell Securities.
    Investors have found comfort in energy stocks that have
positioned themselves for a continuation of slow economic growth
in a low interest rate environment.
    "They have good production growth for the foreseeable future
and they've also cut costs early, delayed some of their
expansion projects and been buying back stock and some nice
dividend increases," Kinsey said of Canadian Natural Resources
, which was up 0.9 percent at C$40.94.
    ($1=$1.12 Canadian)

 (Editing by James Dalgleish)