TSX falls to a one-month low as energy, financials retreat

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell to a one-month low on Thursday as lower oil prices weighed on energy stocks, while financials and consumer discretionary stocks also lost ground as investor appetite for risk waned globally.

The index has rallied nearly 15 percent after hitting an almost 3-1/2-year low in January, but has been unable to sustain moves since mid-March above its 200-day moving average as a rally in commodity prices lost momentum.

"What we are seeing recently is the oil price dictating where the overall market goes in the short term," said Cavan Yie, senior equity analyst at Manulife Asset Management.

U.S. crude prices settled at $37.26 a barrel, down 1.3 percent.

"You are seeing the energy sector leading the charge down, banks are following and then you got some large consumer names that are down as well," Yie added.

The most-influential movers on the index included Toronto-Dominion Bank (Toronto:TD.TO - News), which fell 1.4 percent to C$54.16, and Manulife Financial Corp (Toronto:MFC.TO - News), which declined 5.3 percent to C$17.09.

The overall financials group declined 1.3 percent.

The energy group retreated 1.2 percent, including a 1.8 percent drop in the shares of Canadian Natural Resources Ltd (Toronto:CNQ.TO - News) to C$34.37.

Magna International Inc (Toronto:MG.TO - News) dropped 3.6 percent to C$51.88, while the overall consumer discretionary group was down 1.4 percent.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed down 81.02 points, or 0.61 percent, at 13,266.44. Six of the index's 10 main groups ended lower.

The index touched its lowest since March 4 at 13,217.17.

Quarterly earnings are seen as the next catalyst for the market. Earnings will need to improve if the index is to move higher, said Yie.

Materials and healthcare were among the sectors that advanced.

The materials group, which includes precious and base metals miners and fertilizer companies, added near 1 percent.

Barrick Gold Corp (Toronto:ABX.TO - News) rallied 4.5 percent to C$19.11, while Kinross Gold Corp (Toronto:K.TO - News) was up 6.6 percent at C$4.98.

Spot gold jumped 1.5 percent amid uncertainty around future U.S. interest rates increases, while a drop in global shares rekindled investor appetite for safer assets.

The shares of Valeant Pharmaceuticals International Inc (Toronto:VRX.TO - News) rose 4.3 percent to C$46.70. The company said its lenders had agreed to give it an extra month to file its annual report, providing further reassurance to investors as the company attempts to win back their confidence.

(Reporting by Fergal Smith; Editing by Jonathan Oatis and Alan Crosby)