TORONTO (Reuters) - Canadian stocks hit a 2012 low on Tuesday, as resource and financial shares floundered after a threat by new leadership in Greece to renounce the country's bailout terms raised fears of a new flare-up in the euro zone debt crisis.
On Tuesday, Greece's Leftist candidate for prime minister, Alexis Tsipras, set conditions for a new coalition that the centrist conservative party said would drive the country out of the euro.
Markets roiled at the news, and Canadian stocks sank for a fifth straight session.
"We're down almost 700 points since last Wednesday," said Bruce Latimer, a trader at Dundee Securities. "That's a heck of a haircut in a short period of time."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished down 155.92 points, or 1.3 percent, at 11,704.74. It was the index's lowest close since December 19.
The TSX has fallen more than 5 percent since the beginning of May.
Eight of the TSX's 10 main sectors finished in the red. Losses were led by the heavyweight materials group, which tumbled 2.8 percent as miners were hit by a sharp drop in gold and base metals prices. <GOL/> <MET/L>
Top gold producers Barrick Gold (ABX.TO) and Goldcorp Inc (G.TO) were the sector's most influential decliners. Barrick, the world's largest gold miner, fell 2.5 percent to C$36.71 and Goldcorp sank 4.3 percent to C$34.40.
"With the decline in prices you're starting to get that cleansing process where the baby gets thrown out with the bath water," said Arthur Salzer, executive director and chief executive officer of Northland Wealth Management.
Base metals miners were led lower by copper miner Teck Resources TCKb.TO, down 2.4 percent to C$33.53, and Silver Wheaton SLW.TO, off 3.2 percent to C$26.43.
The unfolding Greek drama may have implications for other struggling euro zone nations such as Spain, which could follow suit in rejecting harsh austerity constraints, said Gavin Graham, president at Graham Investment Strategy.
"If Spain chooses to renegotiate its bonds and make foreign bond owners eat a 75 percent haircut, which is what happened in Greece, then effectively the French and German banking systems are going to be under severe stress," said Graham.
Canadian financial firms, which have less exposure to risky European debt holdings than their global counterparts, were down 1.2 percent. Losses were led by major lenders Royal Bank of Canada (RY.TO), down 1.7 percent at C$54.09, and Toronto-Dominion Bank (TD.TO), off 1.5 percent at C$80.42.
Energy shares were also down, slipping 1.1 percent. Oil prices fell for a fifth day running on Tuesday, with U.S. crude down 8.62 percent, the biggest five-day percentage loss since October. <O/R>
In other company news, shares of Research In Motion Ltd RIM.TO rose 2.1 percent to C$12 after the struggling BlackBerry maker named chief marketing and operating officers on Tuesday ahead of the launch of its next-generation BlackBerry 10 smartphones later this year.
Canadian Pacific Railway (CP.TO) stock fell 1.1 percent to C$73.69 after the head of U.S. hedge fund Pershing Square Capital Management said on Tuesday that the future of Canada's second-biggest railway should be decided by shareholder vote.
Editing by Leslie Adler