TSX breaches key level, hits 2012 low

Mon May 14, 2012 5:14pm EDT
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By Jon Cook

TORONTO (Reuters) - Canada's resource-heavy main stock index tumbled to a 2012 low on Monday with mining and energy firms selling off as investors fretted about the impact of worsening political turmoil in Greece and signs of weakening Chinese growth.

Greece's anti-bailout, radical leftist SYRIZA party rejected a proposal by the country's president for the creation of a government of technocrats to avoid a repeat election in a few weeks, escalating worries Greece could leave the euro zone.

The news sent Canadian stocks careening below 11,500 - a key technical support level that was last breached in mid-December.

"Breaking 11,500 is certainly a signal that the market is vulnerable for another 250 points on the downside," said Ron Meisels, president and chief technical analyst at Phases & Cycles Inc.

All of Canada's 10 main sectors were in the red. The materials and energy groups both fell at least 3 percent as oil, copper and gold sank to multi-month lows.

Decliners included Goldcorp Inc, down 3.7 percent at C$33.62, Potash Corp, down 1.8 percent to C$40.28, Suncor Energy, down 2.6 percent to C$27.99, Canadian Natural Resources, off 2.4 percent at C$30.25, and Cenovus Energy, which dropped 2.6 percent to C$32.10.

The Toronto Stock Exchange's S&P/TSX composite index finished down 206.14 points, or 1.8 percent, at 11,488.53, its lowest close since November.

The index has fallen nearly 7 percent this month and market watchers expect it could slide even further as conditions in Europe unravel.   Continued...