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CANADA STOCKS-TSX plays defense as oil price falls to near 2009 low

Published 2015-08-17, 04:42 p/m
© Reuters.  CANADA STOCKS-TSX plays defense as oil price falls to near 2009 low
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(Adds portfolio manager comment, updates prices to close)
* TSX ends down 26.35 points, or 0.18 percent, at 14,251.53
* Six of the TSX's 10 main groups fall

By Alastair Sharp
TORONTO, Aug 17 (Reuters) - Canada's main stock index
retreated on Monday, with heavyweight energy and banking stocks
reacting negatively to a fall in the price of U.S. crude to near
a 2009 low and disappointing data from Japan and New York.
Gains among gold miners limited the overall losses, with the
Toronto Stock Exchange's S&P/TSX composite index .GSPTSE
ending the day down 26.35 points, or 0.18 percent, at 14,251.53.
Six of its 10 main sectors declined.
The energy sector fell 1.8 percent, with Suncor Energy Inc
SU.TO down 1.8 percent at C$36.60, as U.S. crude CLc1 prices
fell 1.5 percent to $41.87 a barrel and Brent crude LCOc1 lost
0.9 percent to $48.74. O/R
"It's in a very nervous place right now, if it (the price of
oil) breaks down a couple more dollars it could be very, very
ugly," said John Kinsey, a portfolio manager at Caldwell
Securities.
Crude slipped after Japan said its economy shrank in the
second quarter, while China's slowing growth is also causing
concern.
Meanwhile, manufacturing activity in New York state plunged
in August to its weakest since 2009.
The United States is by far Canada's largest trading partner
and investors hope recovery south of the border stimulates
activity here.
"I do think our economy is weak. There's a lot of problems,"
Kinsey said.
Financial stocks also pressured the index, with Royal Bank
of Canada RY.TO falling 0.7 percent to C$75.43 and Bank of
Montreal BMO.TO down 1 percent at C$72.18. The overall
financials group, which accounts for more than a fifth of the
index's weight, slipped 0.6 percent.
Kinsey said Canadian banks are being targeted by foreign
investors worried about exposure to the country's energy
industry and risk from a possible housing bubble, while many
Canadian investors are compelled to hold them due to their size
relative to the overall market.
Gold miners were among the biggest gainers, as investors
took more defensive positions amid economic uncertainty, with
Goldcorp Inc G.TO up 4.3 percent to C$19.48 and Barrick Gold
Corp ABX.TO advancing 2.3 percent to C$10.30.
"We are getting some defensive capital flows again and some
of that is going back into gold, with people getting worried
about economies in China and Japan and even in Europe," said
Colin Cieszynski, a senior market analyst at CMC Markets Canada.
"It's interesting because after materials, the next three
sectors in terms of performance today on the TSX are healthcare,
telecom and utilities, which are the defensive sectors,"
Cieszynski said.

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(Editing by James Dalgleish and Lisa Shumaker)

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