Toronto stocks dive on sliding oil, metals

Wed Mar 28, 2012 4:51pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - Canada's main stock index tumbled on Wednesday as mining shares were hurt by soft U.S. durable goods data that cast some doubt on the pace of economic recovery, while oil skidded on supply concerns.

A mix of resource names led the index lower, including Suncor Energy Inc (SU.TO: Quote), down 1.2 percent at C$32.48, and Cenovus Energy Inc (CVE.TO: Quote), which fell 2.4 percent to C$35.40. Barrick Gold Corp (ABX.TO: Quote) skidded 1.4 percent to C$43.05, while Teck Resources Ltd TCKb.TO tumbled 3.3 percent to C$34.56.

The key pillars of energy and materials, which comprise some 40 percent of the broader index, sank 1.5 percent and 1.8 percent, respectively.

Oil prices fell on Wednesday on a big rise in U.S. crude inventories and the possibility of a release of strategic oil reserves by the United States and some European nations. <O/R>

Copper prices skidded more than 2 percent after softer U.S. durable goods data cast doubt on the pace of recovery in the world's biggest economy. The data weighed on investor confidence and on the outlook for base metals demand, sending risk assets lower. Bullion prices fell as well. <MET/L> <GOL/>

A key catalyst was data that showed new orders for long-lasting U.S. factory goods increased only modestly in February, supporting the view that economic growth in the first quarter could be lackluster.

Murray Leith, director of research at Odlum Brown in Vancouver, said the report was a main driving factor. But investors are more broadly concerned about China's impact on the resource-laden TSX index.

"The Canadian stock market has been much weaker than the U.S. stock market and that's really been driven by the fact that there's an increasing amount of evidence that the Chinese economy is slowing down," said Leith.   Continued...

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch