TSX sinks to 7-month low on Greece fears

Tue May 15, 2012 5:36pm EDT
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By Jon Cook

TORONTO (Reuters) - Canadian stocks sank to a seven-month low on Tuesday as resource shares continued their May sell-off after Greece said it would hold new elections, heightening concern about its possible exit from the euro zone and the spillover effect on global markets.

Greece's president said the country will hold new elections after politicians again failed to agree on a new government, sparking fears that left-wing politicians opposed to Greece's international bailout terms could win the June elections.

The broad index fell more than 1 percent, with Canadian resource firms the hardest hit. Materials tumbled 3.4 percent, and energy shares slipped 1.8 percent. Gold miners paced losses, with many top producers falling in excess of 3 percent as bullion prices hit a four-month low. <GOL/>

"You've got a combination of profit taking with uncertainty and that makes for a bit of a pullback," said Philip Petursson, managing director, portfolio advisory group at Manulife Asset Management.

Industry heavyweight Barrick Gold (ABX.TO: Quote) fell 3.8 percent to C$35.23, Goldcorp Inc (G.TO: Quote) was down 2.4 percent at C$32.75 and Eldorado Gold (ELD.TO: Quote) dropped 5 percent to C$10.38.

Teck Resources TCKb.TO was off 4.1 percent at C$30.40.

On the energy side, losses were led by Canadian Natural Resources (CNQ.TO: Quote), which fell 2.7 percent to C$29.44 a day after the Alberta government charged the oil and gas producer with releasing poisonous hydrogen sulfide gas from its Horizon oil sands plant two years ago and failing to report the incident.

Suncor Energy (SU.TO: Quote), Canada's largest oil producer, dropped 1.1 percent to C$27.67, as U.S. crude prices fell for a third straight session. <O/R>   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch