April 10, 2012 / 1:54 PM / 5 years ago

TSX hits 2012 low as growth fears sting

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

TORONTO (Reuters) - Toronto's main stock index tumbled on Tuesday to its lowest level in 2012 and turned negative for the year on a resurgence of fears about slowing global growth, pressuring investors to exit riskier assets.

Among the most influential decliners, Suncor Energy (SU.TO) fell 2.1 percent to C$29.68, Royal Bank of Canada (RY.TO) lost 1.1 percent to C$55.95 and Bank of Nova Scotia (BNS.TO) slipped 1.2 percent to C$54.38.

Signs of a cooling U.S. recovery after Friday's release of disappointing data on jobs creation in March and the euro zone's festering debt crisis fueled a view of tepid global growth, stoking safety bids for gold as well as U.S. and German government debt.

Meanwhile, data showed Chinese imports undershot expectations, growing 5.3 percent on the year in March - consistent with other data suggesting soggy domestic demand in the first quarter of the year.

"That's the perfect troika ... growth concerns in Europe, the U.S. and China as well. The China fact has been lingering for a while, it certainly has had an impact on commodity prices here," said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver.

"Investors are also taking their cue from what happened in the last couple years. The month of May sparked significant selloffs in both 2010 and 2011, so it does feel like investors are trying to jump the gun."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 83.21 points, or 0.69 percent, at 11,935.29, bringing the index into negative territory, off 0.2 percent, year to date. Earlier, the TSX hit a trough of 11,868.97, its weakest level since December 30.

"There's this sneaky feeling that perhaps in March the markets were too optimistic in their assessment of the U.S. economic recovery and the nonfarm payrolls on Friday kind of knocked that down and now we're trying to re-establish some sort of a footing," said Carlos Leitao, chief economist at Laurentian Bank Securities.

Industrial issues also weighed, as shares of Canadian National Railway (CNR.TO) and Canadian Pacific Railway (CP.TO) fell 2.1 percent and 1.9 percent, respectively, after the latest industry data indicated a slight North American rail traffic decline on the back of weakness in coal and agricultural product shipments.

Investors were also expected to take their cue from the start of earnings season south of the border. Dow component Alcoa Inc (AA.N) climbed 5.4 percent to $9.82 in extended trading after the aluminum maker reported its quarterly results.

Among the bright spots on the index were gold miners, up 2.1 percent, as bullion prices climbed, with the sharp losses in equities triggering safe-haven buying. <GOL/>

Barrick Gold Corp (ABX.TO) rose 2.2 percent to C$41.71 and Goldcorp Inc (G.TO) added 1.8 percent to C$41.65.

Base-metal miners also rallied 2.6 percent amid chatter of a takeover of First Quantum Minerals (FM.TO), which jumped 8.8 percent to C$21.11.

Rumors emerged last week in Britain that the miner might be a target for Rio Tinto (RIO.L), Glencore (GLEN.L), or other diversified miners.

Additional reporting by Jon Cook; Editing by James Dalgleish

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