Golds Lead Toronto Stocks Sharply Lower at Midday 2004-04-20 12:19:43 EST
TORONTO (Reuters) - Toronto stocks were more than 60 points lower at noon on Tuesday as a drop in commodity prices hit resource shares and inflation jitters pushed down financial issues.
The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> was down 64.36 points, or 0.7 percent, at 8,638.46 at midday. Volume was a light 95.5 million shares worth C$1.26 billion.
All but three of the TSX index's main groups were lower, led down by a 2.1 percent decline in the gold index and a 1 percent drop in energy stocks. The financial index, which makes up about one-third of the overall index, was down 0.7 percent.
"A lot of gold stocks, oil stocks and some of the other mining stocks are feeling some of the pressure today. Throw in the banking stocks that are responding to the fear of higher interest rates and that is pretty much Canada today," said Peter Arender, a portfolio manager at Acker Finley, in Toronto.
Arender said the tone of the market was set early in the day with the release of Canadian consumer prices, which rose 0.7 percent year-on-year in March due to widespread increases in the cost of services.
Also, the Bank of Canada's measure of annual core inflation rose to 1.3 percent in March from 1.1 percent in February due to rising clothing, travel and vehicle prices.
"I still don't think you get too excited about a core rate of 1.3 percent year-over-year. That's not big inflation. I wouldn't be too worried about it yet, but that seems to be what the markets are responding to," he said.
All of the country's big banks slipped on the day, led by Bank of Nova Scotia , which fell 50 Canadian cents, or 1.4 percent, to C$35.10, and Bank of Montreal ,which was off 41 Canadian cents, or 0.8 percent, at C$52.77.
Toronto's gold index, home to some of the world's biggest gold miners, dropped along with the price of the precious metal, as investors waited for testimony by U.S. Federal Reserve Chairman Alan Greenspan for hints on when U.S. interest rates might head higher.
Greenspan is set to testify on the banking sector before the Senate Banking Committee on Tuesday. On Wednesday he appears before the congressional Joint Economic Committee.
Robust U.S. jobs, sales and inflation data in recent weeks have fueled speculation the U.S. central bank might raise rates by August.
Glamis Gold Ltd. , a mid-tier producer, was off 60 Canadian cents, or 2.8 percent, at C$21.20, while Barrick Gold Corp. , the third largest gold producer in the world, dropped 36 Canadian cents, or 1.3 percent, to C$28.54.
Canadian Natural Resources Ltd. , the country's third-largest oil producer, was off C$1.00, or 1.7 percent, at C$59.00.
A 0.5 percent boost in utilities issues and a 0.2 percent climb among telecommunications stocks helped temper the losses.
