TSX sinks to three-month low on growth fears, Poseidon plunges
By Claire Sibonney
TORONTO (Reuters) - Canadian shares tumbled to a three-month low on Thursday, hit by global recession fears, violence in the Middle East, and a massive drop in the stock price of Poseidon Concepts Corp PSN.TO after the energy services company cut its outlook.
It was the fourth straight days of falls for Toronto's main stock index, now down 1.2 percent since the start of the year.
The materials sector, home to mining companies, dropped more than 2.0 percent as commodity prices slid, with Goldcorp Inc (G.TO: Quote) down 3.3 percent at C$39.92 and Barrick Gold (ABX.TO: Quote) falling 2.1 percent to C$33.28.
Gold prices fell more than 1.0 percent to a one-week low as data from the World Gold Council showed global demand dropped.<GOL/>
"We've seen quite a flood of money leave the gold group, and that's largely because earnings haven't been up to par in some of the bigger names in the group," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
Picardo noted especially disappointing results from Barrick and Iamgold Corp IMG.TO, down 1.4 percent to C$11.81.
Financial markets have also been hit by worries fears about budget negotiations in Washington, the failure of which could trigger tax hikes and spending cuts that could push the U.S. economy, the world's biggest, into recession.
"The biggest issue for investors is still the 'fiscal cliff' in the United States and the entrenched political positions on both sides," said Julie Brough, vice president at Morgan Meighen and Associates. Continued...