TSX falls as telecoms, gold miners tumble

By John Tilak

TORONTO (Reuters) - Canada's main stock index fell on Wednesday as telecoms stocks dropped after reports that big U.S. player Verizon Communications Inc is looking to enter the Canadian market, while tumbling bullion prices dragged gold miners lower.

The weakness in the two sectors more than offset gains in the financial sector after U.S. data helped calm fears of a stimulus rollback.

Revised figures showed U.S. economic growth in the first quarter was slower than first reported, held back by a moderate pace of consumer spending, weak business investment and declining exports.

"The news is negative all over for Canada," said Sal Masionis, a stockbroker at Brant Securities. "The U.S. GDP number doesn't bode too well for our manufacturing."

Reports that Verizon has offered to buy Canadian startup Wind Mobile and is also in talks with rival startup Mobilicity pulled telecoms shares down more than 5.1 percent.

"Verizon is a threat but a long-term threat," Masionis said. "It will take years to get some competition going."

Canada's three dominant telecoms companies all fell hard. BCE Inc lost 4.2 percent to C$41.51, Telus Corp fell 6 percent to $31.36, and Rogers Communications Inc was down 8.3 percent at C$42.10. The three played the biggest role in the index's fall.

The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was down 41.41 points, or 0.34 percent, at 11,964.01, although six of the 10 main sectors on the index were higher. The TSX had jumped 1.4 percent in the previous session.

The materials sector, which includes mining stocks, gave back 1.7 percent. Shares of gold producers fell 4 percent as the bullion price slumped to a near three-year low.

"People are panicking. Gold has to go through a bottoming process," Masionis said. He expects the commodity to fall another $100 before a possible recovery.

Barrick Gold Corp fell 5 percent to C$16.06, and Goldcorp Inc was down 3.3 percent at C$23.81.

Financials, the index's most heavily weighted sector, were up 0.4 percent. Royal Bank of Canada , the country's biggest lender, climbed 0.8 percent to C$60.60, and Toronto-Dominion Bank added 0.6 percent to C$83.29.

(Editing by Peter Galloway)

Source: http://news.yahoo.com/tsx-falls-telecoms-gold-miners-tumble-153901785.html

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