TSX falls as lower U.S. crude hits energy shares

Mon Jun 25, 2012 5:18pm EDT
 
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By Allison Martell

TORONTO (Reuters) - Canada's main stock index dropped on Monday, touching its lowest point in almost three weeks, led by weaker energy stocks as U.S. crude oil fell, with investors worried about the euro zone debt crisis ahead of a major summit this week.

Global equity markets fell on investor skepticism that the June 28-29 European Union summit would produce substantive measures to tackle the debt crisis. <MKTS/GLOB>

U.S. crude prices were also lower on summit doubts and as the first named storm to hit the Gulf of Mexico this Atlantic hurricane season missed production-rich areas. <O/R>

"If Europe brings the global economy into a big recession, there's a huge risk to the Canadian market because of its exposure to resources," said Marc-Andre Robitaille, president and portfolio manager at Robitaille Asset Management in Montreal.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 105.15 points, or 0.92 percent, at 11,330.39. The index at one point hit 11,295.06, its weakest level since June 4.

"Europe remains a very large cause for concern," said Marco Lettieri, economist at National Bank Financial in Montreal. "As a result there's a high risk premium that continues to be put on to the market."

The heavyweight oil and gas group played the biggest role in leading the market lower, dropping 2.1 percent. Financial issues declined 1.4 percent.

Leading decliners included Royal Bank of Canada (RY.TO: Quote), which fell 1.9 percent to C$50.95, while Suncor Energy (SU.TO: Quote) fell 2.0 percent to C$27.71.   Continued...

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