Banks drag TSX to one-week low on Cyprus fears
By John Tilak
TORONTO (Reuters) - Canada's main stock index fell to a one-week low on Thursday as investor anxiety over the threat of a debt default and banking meltdown in Cyprus spurred weakness in financial and energy shares that a surge in gold-mining stocks couldn't overcome.
Stronger manufacturing data from China and the U.S. Federal Reserve's recommitment on Wednesday to its ongoing stimulus program prevented the fall from becoming steeper.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 78.68 points, or 0.61 percent, at 12,747.87, very close to its lowest level of the day and its lowest point since March 14.
The crisis in Cyprus revived questions about the economic health of the broader euro zone and brought into focus the risks investors there must face.
"It reinforces the piece that says the problems in Spain, Portugal, Greece and other locations aren't going away in a hurry," said Robert McWhirter, president and portfolio manager at Selective Asset Management.
The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its banks.
"If this goes down to the wire, there is some risk to the markets," said Stan Wong, vice president and portfolio manager at Macquarie Private Wealth. "Being a little cautious and holding some cash would make some sense."
Financials, the index's weightiest sector, were down 0.8 percent. Royal Bank of Canada (RY.TO: Quote), the country's biggest bank, slipped about 1 percent to C$60.74, and Toronto-Dominion Bank (TD.TO: Quote) fell 0.7 percent to C$83.67. Continued...