TSX tumbles on Spain, China worries

Wed May 30, 2012 5:01pm EDT
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By Jon Cook

TORONTO (Reuters) - Toronto's main stock index hit a one-week low on Wednesday as oil and gas and mining firms slumped on increased global growth fears, fueled by the escalating euro zone debt crisis and signs from China that it is not planning a large economic stimulus.

Rising borrowing costs for Spain and Italy and the latest poll showing a lead for Greece's left-leaning, anti-austerity parties ahead of next month's elections added to concerns about the region's economy being enveloped in the debt turmoil.

"There is this huge uncertainty sitting out there in front of the market," said David Cockfield, managing director and portfolio manager at Northland Wealth Management. "As long as it doesn't get mitigated some way or other, it's just going to keep on scaring the daylights out of people."

All of Canada's 10 main sectors finished lower. The heavyweight energy sector slid almost 4 percent as U.S. crude fell nearly $3 and was on track for its biggest percentage monthly loss since December 2008. <O/R>

Declines were led by major oil and gas producers. Canadian Natural Resources (CNQ.TO: Quote) plunged 6.8 percent to C$29.85, Suncor Energy (SU.TO: Quote) slipped 3.6 percent at C$28.15 and Cenovus Energy (CVE.TO: Quote) fell 3 percent at C$32.10.

The base metals mining index fell more than 3 percent, as copper prices plumbed a 2012 low. Miners on the downside included Teck Resources TCKb.TO, which slid 3.7 percent to C$31.29, Potash Corp (POT.TO: Quote), down 0.8 percent at C$40.63, and First Quantum Minerals (FM.TO: Quote), down 3.4 percent at C$17.67.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished down 176.08 points, or 1.52 percent, at 11,433.22, its lowest close in a week. The index has slumped more than 7 percent so far in May.

Financial shares were also shaken by fears about Greece and Spain, falling 1.1 percent. Top insurer Manulife Financial (MFC.TO: Quote) led losses, down 4.5 percent to C$10.90. Toronto-Dominion Bank (TD.TO: Quote) shed 1.2 percent at C$77.99, while Royal Bank of Canada (RY.TO: Quote) dropped 0.7 percent to C$50.64.   Continued...

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