TSX falls as oil slump hurts energy stocks; BlackBerry tumbles

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Friday, dragged down by a 7.6 percent drop in BlackBerry Ltd (Toronto:BB.TO - News) shares on disappointing earnings and a slump in oil prices that hurt energy companies.

Still, the index closed 0.6 percent higher on the week after having rallied into quarter-end on Thursday. March was its best monthly performance in more than four years.

Investors tried "to close out the quarter on a good note and then what you're seeing today is just a little bit of repositioning," said Bryden Teich, associate portfolio manager at Avenue Investment Management.

The most influential weights on the index included Canadian Natural Resources (Toronto:CNQ.TO - News), which declined 4.4 percent to C$33.60, while TransCanada Corp (Toronto:TRP.TO - News) was down 2.9 percent at C$49.59. The overall energy group retreated 2.6 percent.

U.S. crude prices were down 4.3 percent at $36.71 a barrel.

BlackBerry tumbled to C$9.74 after the company reported a larger-than-expected slide in fourth-quarter revenue amid weak hardware sales.

The heavyweight financials group slipped 0.1 percent.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed down 54.03 points, or 0.4 percent, at 13,440.33. Six of the index's 10 main sectors ended lower.

Teich said the recovery in a risk-driven rally, which helped propel the market higher since January, has run its course.

"For the market to move higher, you really have to see a return to strong fundamentals from an economy perspective," he added. "We are seeing early signs of improvement in fundamentals."

Canadian business sentiment improved in the first quarter, although it remained subdued overall as the positive effects from foreign demand were offset by the drag of cheaper oil prices.

Solid U.S. payrolls data stoked speculation that the Federal Reserve may press ahead with interest rate hikes this year, weighing on spot gold .

The materials group, which includes precious and base metals miners and fertilizer companies, rose 0.5 percent, however. It included a 0.8 percent rise in the shares of Barrick Gold Corp (Toronto:ABX.TO - News) to C$17.78.

Valeant Pharmaceuticals International Inc (Toronto:VRX.TO - News) rose 7.3 percent to C$36.55. The company's stock had plummeted since August over a string of controversies, including U.S. government scrutiny of its drug price hikes and former ties to a specialty pharmacy.

"There were a ton of people (investors) that wanted it off its books for quarter-end," said Teich.

(Additional reporting by Alastair Sharp; Editing by James Dalgleish and Grant McCool)