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CANADA STOCKS-TSX at lowest in 7 weeks as Brexit hits financial shares

Published 2016-06-27, 05:02 p/m
© Reuters.  CANADA STOCKS-TSX at lowest in 7 weeks as Brexit hits financial shares
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(Adds comments, updates prices to close)
* TSX ends down 202.09 points, or 1.45 percent, at 13,689.79
* Index at lowest close since May 9
* Seven of the TSX's 10 main groups fall

By Alastair Sharp
TORONTO, June 27 (Reuters) - Canada's main stock index
notched its lowest close in seven weeks on Monday, as the
fallout from Britain's vote to leave the European Union pummeled
financial stocks and energy shares fell with retreating oil
prices.
The heavyweight financials sector fell 2.1 percent, to its
weakest since early April, as uncertainty over London's position
as a global financial hub weighed and investors sought to
calculate the likely hit to global economic growth.
Oil prices plunged about 2 percent amid a rallying dollar
and market uncertainty in the aftermath of Thursday's vote,
while Canadian banks fell in sympathy with European peers.
The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 202.09 points, or 1.45 percent, at
13,689.79, its weakest close since May 9. Seven of its 10 main
industry sectors fell, with three decliners for every gainer.
Offsetting the declines was a string of gold miners, as
bullion maintained a two-year high hit on Friday. GOL/
"The (gold) equities are not overvalued, and we also view
the commodity as having a lot more room to run," said James
Winckler, research associate at MacNicol and Associates Asset
Management.
He added that Brexit should not fundamentally alter the
investment thesis for energy companies, which have recovered
some of their sharp losses along with crude since early 2016.
"If you were bullish on a turnaround in oil, it shouldn't
have changed your perspective," he said.
Four of the five most influential declines on the index were
financial stocks, with Royal Bank of Canada RY.TO down 2.6
percent to C$75.20 and insurer Manulife Financial Corp MFC.TO
off 5.1 percent to C$16.47.
Car parts manufacturers Magna International Inc MG.TO shed
6.4 percent to C$44. Magna has nine manufacturing facilities in
England and plans for another.
Meanwhile Fairfax Financial Holdings Ltd FFH.TO , expected
to perform well in an economic downturn given its bets on low
growth and low rates, added 1.9 percent to C$677.80. It also
bucked the falling financial services trend on Friday.
The energy group retreated 2.7 percent, while industrials
fell 1.6 percent and technology stocks lost 2.7 percent.
The materials group, which includes precious and base metals
miners and fertilizer companies, was marginally lower.

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