TSX dips on stimulus fears, sluggish data

Thu May 23, 2013 4:47pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John Tilak

TORONTO (Reuters) - Canada's main stock index dipped on Thursday as fears the U.S. Federal Reserve will dial back its bond-buying program and pessimism following sluggish economic data from China and Europe fueled declines in all major sectors.

Weakness in Toronto-Dominion Bank further weighed on the market after the country's No. 2 lender reported earnings slightly below expectations.

Investors were nervous after Fed Chairman Ben Bernanke told Congress on Wednesday that a decision to scale back massive bond buying each month could come at one of the U.S. central bank's "next few meetings" if the economy looked set to maintain momentum.

The benchmark Canadian index, which tracked weak global markets, eased from gains made in the previous four sessions.

"It's the fallout of Ben Bernanke's testimony," said Gavin Graham, chief strategy officer at Integris Pension Management. "That's the first concrete suggestion that maybe they'll reduce the bond buying program."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 94.41 points, or 0.74 percent, at 12,658.09.

"We all know that at some point, the Fed's going to have to do something to withdraw some of that liquidity they put in the marketplace," said Irwin Michael, portfolio manager at ABC Funds.

"It's a game of chicken," he added. "People are waiting to find out when, and they will probably react in the short run."   Continued...

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