Profit-taking on TSX
TORONTO (Reuters) - Toronto's main stock index closed lower yesterday as gold miners fell on profit-taking, outweighing a rise in financials and general market optimism over an aid package for Greece.
Barrick Gold Corp, the world's biggest gold producer, dropped 2.2 percent to C$43.34, while Agnico-Eagle fell 1.7 percent to C$63.35.
Goldcorp Inc, which said it agreed to sell its Escobal silver deposit in Guatemala for $505 million, lost 1.7 percent to C$43.16.
The price of US spot gold rose to its highest point this year after a hefty recent rally built on safe-haven buying due to fears of sovereign debt problems in Europe, but investors decided to take a step back from gold-mining stocks. "Gold stocks in recent days seem to have gotten a little ahead of themselves, so a pullback today could very well be due to profit-taking on some of the biggest gainers in that sector," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
The resource-laden TSX may also have been pressured by news that the Australian government put a 40 percent tax on mining profits to help raise workers' retirement incomes, sparking warnings that huge new investments could be lost. "I think maybe that has an impact because people are worried that may happen more globally," said Paul Harris, portfolio manager at Avenue Investment Management.
The index's materials sector, home to miners and fertiliser companies, fell two percent.
The Toronto Stock Exchange's S&P/TSX composite index closed down 14.19 points, or 0.12 percent, at 12,196.51.
"There certainly is an element of caution in the market, but the underlying sentiment is quite strong," Picardo said.
Offsetting the weakness in the materials sector was a 0.5 percent rise in financial issues, which were encouraged by hopes of stability resulting from the Greek aid package and by data that indicated the US economy was on firmer footing.