China growth angst takes TSX to 10-month low
By John Tilak
TORONTO (Reuters) - Canada's main stock index slumped on Monday, hitting a 10-month low, as anxiety about China's economic growth helped weaken commodity prices and fuel declines in shares of gold and energy producers.
The market, which has been roiled by the U.S. Federal Reserve's plans to tighten monetary policy, extended its slide from last week, when it lost 1.6 percent.
Worries about a crisis in the Chinese banking system and the ability of the country to deal with a slowing economy have intensified. Those concerns caused the price of bullion to drop about 1 percent and triggered a 4.2 percent fall in shares of gold miners.
The Canadian market, with its large exposure to materials and energy stocks, has been reacting sharply to news out of China, a major destination for resource exports.
"The markets are in a risk aversion phase. They are going to take a wait-and-see approach," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
Investors are trying to re-price Chinese economic growth and liquidity concerns to some extent, he said, adding they were more than anything looking for stability in commodity prices.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE unofficially closed down 158.80 points, or 1.32 percent, at 11,836.86, after reaching 11,759.04, its lowest level since August 2012.
The index is down 4.8 percent since the start of the year, offering a contrast to solid gains made by other major global indices, such as the S&P 500 .SPX. Continued...