TSX lower as investors focus on end to ECB rate cuts

By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell in volatile trade on Thursday, just its second slip in 11 sessions, as investors looked past the European Central Bank's rate cuts and expansion of stimulus to focus on signals that there would be no further cuts.

The broad decline - nine of the index's 10 main groups were lower - was offset by a 2.9 percent jump in materials stocks led by major gold producers as bullion prices gained.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 13.76 points, or 0.10 percent, at 13,379.14.

It had jumped above 13,500 in early trade after the ECB delved deep into its remaining arsenal of stimulus options, cutting interest rates and expanding asset-buying.

"People were like 'wait a minute, OK this is a great announcement but has anything changed? Not really. Let's sell the news'," said Manash Goswami, a portfolio manager at First Asset Investment Management, pointing to broadly negative corporate earnings trends in both the United States and Canada.

Industrial stocks fell 1.1 percent, while consumer staples fell 1.4 percent. That included a 14.7 percent drop in Empire Co Ltd (EMPa.TO) to C$22.83 after the owner of the Sobey's grocery chain reported earnings late on Wednesday.

The heavyweight financials group slipped 0.2 percent and utilities stocks were off 0.5 percent.

Energy stocks fell 0.2 percent, holding on to most of their recent gains despite a pullback in the price of crude oil. [O/R]

Goldcorp Inc (Toronto:G.TO - News) jumped 5.7 percent to C$22.04, while Barrick Gold Corp (Toronto:ABX.TO - News) gained 4.3 percent to C$18.92.

The most influential gainers also included First Quantum Minerals Ltd (Toronto:FM.TO - News), which rose 13.3 percent to C$7.09 after it agreed to sell a Finnish mine for nickel, copper, gold and platinum for $712 million.

First Asset's Goswami said there was no reason for the index not to retest its January lows below 12,000 in the next few weeks given rich valuations and recent limp economic data.

"It's been nice to have the rally, don't get me wrong, but I haven't had strong conviction in it," he said.

(Reporting by Alastair Sharp Editing by W Simon and Sandra Maler)