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Roundup: Canadian stocks lower on European stimulus surprise

Xinhua, March 11, 2016 Adjust font size:

Canada's main stock market in Toronto wiped out its initial gains Thursday following economic stimulus measures announced by the European Central Bank (ECB).

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index lost 13.76 points, or 0.10 percent, to close at 13,379.14 points. Seven of the TSX index's eight main sub-sectors ended lower.

The ECB cut its main interest rate from 0.05 percent to a record low of zero percent and cut its bank deposit rate, from minus 0.3 percent to minus 0.4 percent.

The bank also expanded its asset purchase program from 60 billion euros (66.81 billion U.S. dollars) to 80 billion euros (89.08 billion dollars) per month, beginning in April.

However, ECB President Mario Draghi suggested Thursday that years of interest rate cuts may finally come to an end.

"Investors are a little wary about the decision as they were expected to do all of this last month and they pushed it off until now," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

In other central bank news, the Reserve Bank of New Zealand lowered its key lending rate from 2.50 percent to 2.25 percent and created the atmosphere for more cuts in the future.

Toronto market did follow global shares that were boosted by further easing in Europe. The TSX index ducked into negative territory after having enjoyed nine positive sessions in the last 10.

Heavyweight bank stocks helped push the index higher in early trading, with Royal Bank of Canada advancing 1 percent and Bank of Nova Scotia up 0.9 percent.

Gold miners joined the party even as the U.S.-dollar denominated price of the precious metal pulled back. Barrick Gold Corp. gained 4.30 percent to 18.92 Canadian dollars (14.18 U.S. dollars) per share, while B2Gold Corp. shares rose 8.62 percent to 1.89 Canadian dollars.

The most influential gainers also included First Quantum Minerals Ltd, which rose 13.26 percent to 7.09 Canadian dollars after it agreed to sell a Finnish mine for nickel, copper, gold and platinum for 712 million Canadian dollars.

Energy infrastructure company TransCanada Corporation is in talks to take over a U.S. pipeline firm, Columbia Pipeline Group Inc., for as much as 10 billion Canadian dollars. TransCanada shares were off 3.19 percent to 47.63 Canadian dollars.

On the economic slate, Statistics Canada reported its new housing price index rose 0.1 percent in January, following an identical increase in December.

The agency said the advance was led by higher new home prices in Vancouver and the combined region of Toronto and Oshawa. The increase was largely moderated by lower or unchanged prices in two-thirds of the metropolitan areas.

South of the border, U.S. President Barack Obama offered a red-carpet welcome for Canadian Prime Minister Justin Trudeau at the White House on Thursday, ending a frosty period in U.S.-Canada relations and celebrating shared goals on climate and trade.

The Canadian dollar was traded lower at 0.7493 U.S. dollar, compared with Wednesday's closing rate of 0.7547 U.S. dollar. Endit