TSX hits 7-month low on global selloff

Fri May 18, 2012 5:15pm EDT
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By Jon Cook

TORONTO (Reuters) - Canadian stocks hit a seven-month low on Friday, erasing early mining and energy gains as concerns about Europe's deepening debt woes and after Facebook's (FB.O: Quote) disappointing market debut fueled a flight to safety.

Nearly all of Canada's 10 main sectors finished in the red. Losses were led by the heavyweight financial group, which fell 1 percent as fears about Greece leaving the euro zone and Spain's fragile banking sector came back into focus as global equity markets tumbled in the afternoon. <MKTS/GLOB>

Royal Bank of Canada (RY.TO: Quote) shares fell 0.5 percent to C$51.70, Bank of Nova Scotia (BNS.TO: Quote) was down 1.2 percent to C$51.11, Toronto-Dominion Bank (TD.TO: Quote) slipped 0.9 percent to C$76.94 and insurer Sun Life Financial (SLF.TO: Quote) shed 1.9 percent to C$20.92.

Manulife Financial Corp's (MFC.TO: Quote) shares slumped 1.5 percent to C$10.99 after a report put Canada's top insurer among a group of suitors expected to place first-round bids to buy ING Groep's Asia life insurance unit in a deal worth about $6.5 billion to $7 billion.

A sloppy debut by Facebook Inc (FB.O: Quote) spoiled hopes that a spectacular open for the most-anticipated stock sale in years would brighten the mood in what has been a gloomy month for markets.

"There was a negative aspect thrown onto the market by this whole deal," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "From there it was just a case of reacting to the disappointment to the issue, the disappointment of the day, the disappointment of the week and the market is down."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 50.04 points, or 0.4 percent, at 11,280.64. It touched 11,256.72, its lowest level since October 5.

The TSX finished the week down 3.5 percent - its biggest weekly drop since the end of November. It has fallen 8.5 percent in May as conditions in Europe have unraveled.   Continued...

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