TORONTO, March 13 (Reuters) - Canada's main stock index fell 0.7% on Monday as investors sold banking shares amid a global sell off on fears of contagion risk from the collapse of Silicon Valley Bank (SVB), but gains in gold miners helped offset some of the declines.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was down 165.02 points, or 0.8%, at 19609.90 in early morning trading, after falling as low as 19,427.53, the lowest since Jan. 5.
"Canadian banks are down a fair bit this morning, which doesn't really make sense because bank issues in the U.S. have zero to do with Canadian banks," Steve Palmer, chief investment officer at AlphaNorth Asset Management.
"People should not have any reason to panic," he said adding that Canadian bank stocks, and shares more generally in Canada, will recover over the next 24 hours.
Within the first 10 minutes of trading on Monday morning, the main index had fallen 1.7% to 19436.22.
U.S. authorities on Sunday launched emergency measures to shore up confidence in the banking system after the failure of SVB (SIVB.O) threatened to trigger a broader financial crisis.
Canadian banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), on Sunday said it was taking temporary control of SVB's unit in the country.
The financials group (.SPTTFS) was down 2.5% in the early morning trading session while many other Canadian stocks also fell. Toronto Dominion Bank (TD.TO) shares fell 4% while Royal Bank of Canada (RY.TO) shed 3%, while Bank of Nova Scotia (BNS.TO) dropped 2.5% and CIBC was down 4%.
Shares in Canadian digital advertising-tech firm AcuityAds Holdings Inc. (AT.TO) jumped 7.7% after it resumed trading on Monday. The stock tumbled more than 15% on Friday before the stock was halted after it said it maintained U.S. bank accounts with SVB which amount to $55 million in deposits.
Energy stocks (.SPTTEN) were down 4.9% and industrials (.GSPTTIN) down 1.1%.
The materials group, which includes precious and base metals miners and fertilizer companies, (.GSPTTMT), was the best performing at the start up the day, up 1.8%.
The Canadian dollar rose against its U.S. counterpart on Monday as the greenback fell on expectations the Federal Reserve will be less aggressive in raising interest rates after authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank (SIVB.O).
The loonie was trading 0.8% higher at C$1.3732 to the greenback, or 72.81 U.S. cents.
