Miners and banks hit TSX after weak factory data
By John Tilak and Alastair Sharp
TORONTO (Reuters) - Canada's main stock index fell on Monday, led lower by gold mining and financial stocks, after weak U.S. and Canadian manufacturing data raised doubts about the economic outlook.
U.S. manufacturing unexpectedly contracted in November, falling to its lowest level in more than three years in a sign that the sector may be struggling to gain traction, a report from Institute for Supply Management said.
"It's the ISM numbers. That is a concern, given how important the health of the U.S. economy is to Canada," said Gavin Graham, president of Graham Investment Strategy.
Canadian manufacturing growth slowed for a fifth straight month in November and hit a more than two-year low, according to the RBC Canadian Manufacturing Purchasing Managers Index.
U.S. talks on avoiding the "fiscal cliff" also weighed on the market, given that there did not appear to be a keen desire to compromise, Graham added.
Failure to reach a deal would trigger a combination of U.S. government spending cuts and tax increases in early 2013 that could tip the economy back into recession.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 69.62 points, or 0.57 percent, at 12,169.74. Seven of the 10 main sectors declined.
The index had earlier hit an intraday high at 12,252.27, its highest point since November 7, after investors reacted to economic data from China that pointed to the giant Asian economy regaining its vigor after seven straight quarters of slowing growth. Continued...