TSX dives as stimulus worries hit resource shares
By Peter N Henderson
TORONTO (Reuters) - Canada's main stock index fell sharply on Tuesday in a broad selloff led by materials and energy shares following signs that global central banks are moving away from monetary stimulus.
The biggest drag on the market was integrated energy company Suncor Energy Inc (SU.TO: Quote), which fell 2.3 percent to C$31.07. Other big energy losses included TransCanada Corp's (TRP.TO: Quote), 1.5 percent fall to C$46.12.
Nine of the 10 main subgroups of the TSX index ended the day down.
The wide selloff was sparked by the Bank of Japan, which did not to take any fresh measures on Tuesday to tackle rising government bond yields, which threaten to thwart its $1.4 trillion stimulus program. <MKTS/GLOB>
That announcement followed recent remarks by U.S. Federal Reserve Chairman Ben Bernanke that signaled a possible slowdown in the Fed's asset-buying program in the coming months.
"The selloff today is a reflection of concerns around reducing monetary policy stimulus around the world," said Craig Fehr, Canadian market strategist at Missouri-based investment firm Edward Jones. "It's more about rhetoric than action, there isn't a tremendous amount of economic data. We're just seeing knee-jerk reactions from the market."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended the day down 159.10 points, or 1.28 percent, at 12,223.57.
The decline was mirrored by equity markets globally, along with falls in the price of commodities and the value of the U.S. dollar. Continued...