China growth fears spook TSX shares

Tue Jul 10, 2012 4:58pm EDT
 
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By Jon Cook

TORONTO (Reuters) - Canada's main stock index hit a July low on Tuesday, sliding with mining and energy shares, as growing fears about China's economy outweighed optimism that euro zone policymakers were taking steps to tackle the region's debt crisis.

Investors fretted about a hard landing for the world's second largest economy after data on Tuesday showed Chinese import growth slowed sharply in June to 6.3 percent, well short of the forecast for a 12.7-percent increase.

The news was not a good harbinger for China's first-half GDP data expected later this week.

"The data from China was rather disturbing," said Pat McHugh, Canadian equity strategist at Manulife Asset Management. "Imports declined by about half and export growth declined."

Canada's heavily-weighted materials sector, which includes miners, sank 2.7 percent. The equally influential oil and gas group slid 2 percent.

"We haven't really seen commodities do much of anything except slip," said McHugh.

The biggest drags on the market included: Barrick Gold (ABX.TO: Quote), off 2.6 percent at C$36.37; Goldcorp Inc (G.TO: Quote), which shed 2.1 percent to C$37.63, Potash Corp POT.TO, fell 1.9 percent to C$44.97; Cenovus Energy CVE.TO, down 2 percent at C$32.25, and Canadian Natural Resources (CNQ.TO: Quote), which dipped 1.8 percent to C$25.84.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished down 122.45 points, or 1 percent, at 11,512.22. The index at one point hit 11,492.36, its lowest since June 29.   Continued...

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