TSX slips as energy stocks weigh

TORONTO (Reuters) - Canada's benchmark equity index slipped in afternoon trade on Tuesday as energy companies fell despite rising tensions over Iran supporting crude oil prices.

The four heaviest weights on the resource-rich Toronto index were oil companies, while banking and mining stocks that had pushed higher in morning trade also trended lower.

The fall also went against slight gains in copper and a flat but near-record high gold price as investors focused more on signs that economic recovery is not assured despite the monetary easing of several major central banks.

"Equities as a group tend to move with broader-based macro-economic signals," said Patricia Mohr, vice president, economics and commodity market specialist at Scotiabank.

"So if investors are worried about global economic growth...then sometimes equities can actually underperform where commodities prices are," she said, referring to a similar historical disconnect between the rising price of bullion and the lagging performance of gold miners.

At 3:11 p.m. (1911 GMT), the Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was down 71.04 points, or 0.58 percent, at 12,242.50. On Monday it dropped 70 points.

Suncor Energy dropped 2 percent to C$32.13, while Cenovus Energy Inc lost 2.1 percent to C$33.80 and Crescent Point Energy Corp fell 2.4 percent to C$43.68.

Miner Barrick Gold Corp fell 0.3 percent to C$40.35, after notching early gains, while competitor Goldcorp eked out a 0.1 percent gain to C$44.10.

The lack of a solid rising trend in commodity prices could turn away some investors from now on, a fund manager warned.

"With the direction for commodity prices being less certain, the index will be less certain. The general trend for both gold and oil will be higher but will not lead the market," said Brendan Caldwell, president and chief executive of Caldwell Investment Management.

"Unless the U.S. dollar completely collapses and gold and oil go on an unholy tear, which is possible, I think they'll do well but other sectors will outperform and we don't have very much of it in our index," he added, warning that the TSX may struggle to keep up with global peers with deeper exposure to sectors such as technology and consumer discretionary companies.

Husky Energy Inc slipped 0.4 percent to C$26.50 after the integrated oil producer and refiner declared it had reached an impasse with the United Steelworkers union in a four-month strike at the company's 155,000 barrel-per-day Lima, Ohio, refinery.

Shares in Forbes & Manhattan Coal Corp jumped 3.1 percent to 67 Canadian cents after the coal miner said it plans to acquire two South African mines from a unit of Rio Tinto in a bid to boost its output and enlarge its footprint in Africa.

($1=$0.98 Canadian)

(Editing by Carol Bishopric)

Source: http://news.yahoo.com/tsx-may-open-higher-euro-zone-still-concern-124427753--sector.html

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