CANADA STOCKS-TSX pulls back as telecom, energy shares drop

Mon Jul 7, 2014 5:19pm EDT

* TSX down 42.03 points, or 0.28 percent, at 15,172.93
    * Six of 10 main index sectors fall
    * Telus, Rogers among top decliners

    By John Tilak
    TORONTO, July 7 (Reuters) - Canada's main stock index fell
on Monday, pulled lower by a selloff in telecom providers'
shares following news of a new spectrum auction and a drop in
the energy sector after oil prices slipped. 
    The Canadian government said it will auction more prime
wireless spectrum early next year, with more than half the
airwaves set aside for newer players that have struggled to win
business from the country's three dominant telecom companies.
 
    Speculation about an earlier-than-expected rise in U.S.
interest rates also soured investor sentiment. 
    A gain in the U.S. dollar prompted declines in bullion's
price and gold-mining shares, while the reduction of supply
worries in Iraq helped drive the price of oil down to the lowest
in a month.  The U.S. Dollar Index, which
measures the greenback's performance against a basket of major
currencies, edged up 0.04 percent to 80.241.
    Despite Monday's decline, the Toronto stock market is up
about 11 percent this year after climbing steadily in the past
few months.
    "This week there's a little bit of a reality check going
on," said Youssef Zohny, portfolio manager at Stenner Investment
Partners of Richardson GMP Ltd, which manages about C$28.3
billion in assets.
    "Markets are battling a general perception that (valuations)
are pretty stretched," he added. "There is some concern that
markets could get a setback and it wouldn't take too much, given
the strong rally over the last year."
    The Toronto Stock Exchange's S&P/TSX composite index
 fell 42.03 points, or 0.28 percent, to close at
15,172.93. Six of the 10 main sectors in the index were in the
red.
   Telecom shares tumbled 1 percent after the spectrum auction
news. Telus Corp dropped 1.6 percent to C$39.28. Rogers
Communications Inc fell 1.5 percent to C$42.36.
   An index of energy producers' shares slid 0.9 percent, with
Encana Corp shedding 2.5 percent to C$23.80 and
Talisman Energy Inc losing 1.7 percent to C$10.89.
    The gold-mining sector index fell 0.5 percent, reflecting
weakness in the commodity's price. Goldcorp Inc slipped
0.3 percent to C$29.25.
    

 (Editing by James Dalgleish and Jan Paschal)