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MARKETS LIVE BLOG:

STOCKS OPEN MIXED, TESLA SURGES DAY AFTER EARNINGS

Tesla shares jump after EV maker vows to speed up launch of more affordable models

TSX falls to a more than two-year low on weak resource stocks

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell to its lowest in more than two years on Monday, notching deep losses for mining stocks while energy shares weakened despite crude oil prices rebounding from near-11-year lows.

The materials group tumbled just less than 5 percent, while energy stocks retreated 1.7 percent.

The two resource-related groups, which together account for more than a quarter of the index's weight, have been its worst performers this year as oil and other commodity prices slumped.

The big picture for the market is that the commodities cycle peaked about four years ago and is "now heading toward the trough area," according to Keith G. Richards, portfolio manager and technical analyst at ValueTrend Wealth Management.

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Goldcorp Inc (Toronto:G.TO - News) fell 7.7 percent to C$15.24, while Barrick Gold Corp (Toronto:ABX.TO - News) was down 8.9 percent at C$9.69 and fertilizer producer Potash Corp (Toronto:POT.TO - News) lost 3.4 percent to C$23.02.

Encana Corp (Toronto:ECA.TO - News) fell 8.2 percent to C$7.63 after the oil and natural gas producer slashed its dividend and cut its 2016 capital budget. Suncor Energy Inc (Toronto:SU.TO - News) declined 1.9 percent to C$34.55.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) fell 94.46 points, or 0.74 percent, to 12,695.49, having touched its lowest level since August 2013.

Seven of the index's 10 main groups ended the day in negative territory.

Tax loss selling is still evident, according to Paul Hand, managing director at RBC Capital Markets, referring to a typical year-end practice by which investors try to reduce their capital gains tax liability.

The upcoming Federal Reserve interest rate decision is the main focus for the market, according to John Kinsey, portfolio manager at Caldwell Securities.

The U.S. central bank is widely expected to hike on Wednesday for the first time since June 2006.

Financials fell 0.5 percent, including a 0.7 percent drop in Royal Bank of Canada (Toronto:RY.TO - News) to C$72.45.

Telecoms climbed 1.1 percent, with BCE Inc (Toronto:BCE.TO - News) rising 1.1 percent to C$54.58, and Telus Corp (Toronto:T.TO - News) advancing 1.9 percent to C$39.82.

TransCanada Corp (Toronto:TRP.TO - News) rallied 5.2 percent to C$46.37.

U.S. crude prices settled at $36.31 a barrel, up 1.9 percent, after moving within a hair of 11-year lows.

Brent crude lost 0.4 percent to $37.78.[O/R]

Gold futures fell 1.6 percent to $1,060 an ounce. [GOL/]

(Additional reporting by Alastair Sharp; Editing by Meredith Mazzilli and James Dalgleish)