By John Tilak
TORONTO (Reuters) - Canada's main stock index fell to 1-1/2 week low on Monday as a euro zone bailout deal appeared to defuse the Cyprus debt crisis and took the safe-haven shine off bullion prices, sending gold-mining shares lower.
The market was further weakened by a decline in shares of BlackBerry after Goldman Sachs cut its rating on the stock, citing a disappointing U.S. launch for the smartphone maker's new touchscreen device.
Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.
The move is expected to prevent a default and banking meltdown on the island.
"Any closure in a situation like this is welcome," said Philip Petursson, managing director, portfolio advisory group, at Manulife Asset Management. "It provides reassurance that deals are getting done."
However, the weakness in gold shares pulled the Toronto Stock Exchange's S&P/TSX composite index down 18.53 points, or 0.15 percent, to 12,738.82. The index touched 12,734.35, its lowest point since March 14. Six of the 10 main sectors on the index were higher.
The materials sector, which includes mining stocks, was down 1.3 percent, with gold stocks slipping 1.8 percent. The price of the precious metal slumped to a 10-week low as investor appetite for safe haven assets fell sharply after the Cyprus deal.
"I'm not a gold bull," Petursson said. "Gold today has priced in a lot of inflation and a lot of risk that may not materialize in the market over the near term."
"We can see more downside than upside," he added.
Goldcorp Inc lost 2 percent to C$33.64, and Barrick Gold Corp fell 1.3 percent to C$29.62. The index's gold sector is down about 16 percent since the start of the year.
BlackBerry dropped 4 percent to C$14.59, causing a 1.2 percent decline in the information technology sector.
Encouraged by the Cyprus deal, financials, the index's weightiest sector, advanced 0.2 percent, with Toronto-Dominion Bank
climbing 0.4 percent to C$84.32. (Editing by Peter Galloway)
