By Jennifer Kwan
Reuters
Thursday, July 13, 2006

Also published in:

TORONTO (Reuters) - Toronto's main stock index closed nearly 170 points lower on Thursday in a broad-based selloff sparked by rising violence in the Middle East, which pushed up oil prices sharply, stoking inflation fears.

Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, says, “I do believe we’re heading into a period of slowdown in the US.”

The Toronto Stock Exchange S&P/TSX composite index closed 169.13 points, or 1.44 percent, lower at 11,601.94.

"Given the extent of global growth-related concerns and the turmoil in the Middle East it seems as though people are increasingly becoming more defensive," said Neil Andrew, associate portfolio manager at Leeward Hedge Funds in Toronto.

Some equities are "ignoring the direction of many of the commodities," particularly gold and energy, he added, noting the huge selloff is due, in part, to investors increasing their short positions.

Nine of the TSX's 10 main subgroups finished lower, with only the utilities sector eking out a 0.34 percent gain.

The oil and gas group, which makes up about a third of the index's total weight, dropped 0.7 percent, despite surging crude prices, which settled at a record $76.70.

EnCana closed down C$1.78, or 3.O3 percent, at C$56.91. But solid quarterly results helped lift Nexen Inc. 9 Canadian cents, or 0.2 percent, to C$61.71.

Gold and base metal miners lost ground. Barrick Gold Corp. slipped C$1.08, or 3.2 percent, to C$33.18, while Kinross Gold Corp shed 62 Canadian cents, or 4.8 percent, to end at C$12.37.

Financials lost 1.5 percent with Royal Bank of Canada down 76 Canadian cents, or 1.6 percent, at C$46.60, while Toronto-Dominion Bank slipped 81 Canadian cents, or 1.4 percent, to end at $57.54.

"It's a sea of worries today," said Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc., in Vancouver. "It seems everything is on the table."

"I do believe we're heading into a period of slowdown in the U.S.," he added.

In corporate news, shares of media group Corus Entertainment closed down 44 Canadian cents, or 1.1 percent, to C$39.06, despite higher quarterly earnings. Astral Media lost 56 Canadian cents, or 1.5 percent, to settle at C$37.44 after the company reported a 12 percent jump in quarterly profit.

Market volume was 244 million shares worth C$4.7 billion. Decliners outpaced advancers 957 to 515. The blue chip S&P/TSX 60 index closed down 11 points, or 1.7 percent, at 655.07.

The Dow Jones industrial average fell 166.89 points, or 1.52 percent, to end at 10,846.29. The Nasdaq composite index was down 36.13 points, or 1.73 percent, at 2,054.11.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.