The S&P/TSX composite index fell 32.70 points to end the session at 12,145.68.
The Canadian dollar rose 0.35 of a cent to 95.15 cents US.
Oil prices were driven to their highest level in more than a year partly on the unfolding political crisis in Egypt. The country's military has ousted embattled President Mohammed Morsi, suspended the country's constitution and called early elections.
Meanwhile, the U.S. Energy Department reported that crude supplies fell by 10.3 million barrels from the previous week. The decline was more than three times what analysts had expected and came partly from lower supplies from Canada after the temporary Enbridge (TSX:ENB) pipeline shutdown at the end of June.
Crude rose above US$100 a barrel for the first time since May 2012. The August contract on the New York Mercantile Exchange ended ahead $1.64 at US$101.24 a barrel.
TSX energy stocks were up 0.2 per cent.
In Portugal, the government teetered on the brink of collapse, reviving criticism over the eurozone's strategy for dealing with its prolonged financial crisis.
Prime Minister Pedro Passos Coelho has defied calls to resign but was running out of options to keep his centre-right coalition government together following the resignations of two key ministers in a spat over austerity.
The renewed concerns drove gold prices higher as August bullion lifted $8.50 to US$1,251.90 an ounce on the Nymex.
The TSX gold sector was the biggest gainer, up 1.3 per cent, with Goldcorp Inc. (TSX:G) rising 68 cents to $26.02. The base metals sector was down 0.7 per cent while copper prices rose 3.2 cents to US$3.174 a pound for the September contract.
Telecom stocks pulled back once again, off 0.9 per cent, after Mobilicity pushed back a vote on the company's proposed recapitalization plan by a week.
The struggling wireless service provider, which has reportedly held talks with U.S. telecom giant Verizon, did not give a reason for the delay Wednesday, other than to say it wanted to consider "potential alternatives."
Shares of Canadian wireless companies have been mostly weaker since rumours emerged of a potential new competitor in the domestic industry. Rogers Communications (TSX:RCI.B) was off 85 cents to $41.52, but Telus (TSX:T) rose two cents to $31.68.
The global developments impacted Wall Street to a lesser extent in a shortened trading session that ended at 1 p.m. ET ahead of the Independence Day holiday.
The Dow Jones industrials gained 56.14 points to close at 14,988.55. The Nasdaq was up 10.27 points at 3,443.67, while the S&P 500 index was 1.33 points higher at 1,615.41.
In earnings, Sandvine Corp, (TSX:SVC) swung to a US$900,000 profit in the second quarter as the Waterloo, Ont.,-based broadband technology provider posted significantly higher revenues in reversing last year's Q2 loss. Revenues rose 27 per cent to US$23.5 million from US$18.6 million in the same 2012 period. Shares of Sandvine were off nearly eight per cent, or 16 cents, to $1.95.