TSX falls as drop in oil prices, dour data weigh

TORONTO (Reuters) - Canada’s main stock index lost ground on Monday, with shares in energy companies weighing heavily as oil prices tumbled and weak economic data out of Europe and China exacerbated concerns about a global slowdown.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

The index's energy group retreated 3.7 percent, with pipeline operator Enbridge Inc ENB.TO off 3.5 percent at C$46.97 and Suncor Energy Inc SU.TO falling 4.1 percent to C$31.83.

Suncor, the country’s largest oil and gas company, could provide further insight on the overall health of the oil patch when it reports quarterly earnings on Wednesday, according to John Kinsey, a portfolio manager at Caldwell Securities.

“I don’t think the expectations for earnings for (Canadian energy companies) are going to be very high, and because they were beaten up so badly that they will maybe just muddle through here,” he said.

Oil CLc1LCOc1 fell more than 6 percent as weak economic data from China, the world's largest energy consumer, weighed on prices and an OPEC source played down talk of an emergency meeting to stem the decline.

Kinsey said he likes the prospects for pipeline companies and feels they are being unfairly punished by association with the struggling energy industry.

The most influential movers on the index also included Royal Bank of Canada RY.TO, which fell 1.8 percent to C$71.27, and Canadian National Railway CNR.TO, which declined 2 percent to C$74.45.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 147.76 points, or 1.15 percent, to 12,674.37. Seven of the index's 10 main groups were in negative territory.

The index ended on Friday at 12,822.13, closing out the month at its highest since Jan. 6.

Investors were disappointed by euro zone manufacturing data that dovetailed with the fastest contraction in China’s giant factory sector in over three years, while Canada’s manufacturing sector also contracted in January, its sixth monthly fall.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.7 percent.

Gold XAU= rose to a three-month high on worries about global economic growth and hopes for easier monetary policy.

Shares in online gambling company Amaya Inc AYA.TO surged 20 percent to C$18.00 after it said its CEO had offered to buy the company for about C$21 a share.

Royal Nickel Corp RNX.TO shares jumped nearly 19 percent to C$0.19 after announcing two cash and stock acquisitions that transform the mine developer into a cash-generating nickel, copper and gold producer.

Additional reporting by Fergal Smith; Editing by Nick Zieminski and James Dalgleish