TSX hits five-month low as resources dive on growth worries

Wed Apr 17, 2013 5:15pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index fell to a near five-month low on Wednesday in a broad selloff, with resource stocks showing the biggest declines, on mounting worries about global economic growth and weak U.S. earnings.

Oil prices also tumbled on demand concerns, and weighed on oil and gas shares, which dropped 2.6 percent. <O/R>

Investors were disappointed by U.S. quarterly reports from companies such as Bank of America Corp (BAC.N: Quote) and Yahoo Inc (YHOO.O: Quote). .N

Toronto stocks are down almost 4 percent this year as weak commodity prices have weighed on resource shares, which make up about 40 percent of the index.

"It's just a very skittish market," said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management. "You cannot fight the tape when the selling is for another reason than fundamentals."

However, she said the excessive selling could result in a rebound. "At some point in the next couple of weeks we could see a violent ‘melt-up' because the market is oversold."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 172.63 points, or 1.42 percent, at 11,947.29. The index earlier fell to 11,916.64, its lowest point since November 19.

Nine of the 10 main sectors on the index were in the red.   Continued...

A man walks by a sign displaying TSX information in Toronto, August 17, 2009. REUTERS/Mark Blinch