BMO dives, pulls TSX to five-week low
By John Tilak
TORONTO (Reuters) - Canada's main stock index fell on Tuesday to its lowest in more than five weeks after Bank of Montreal's (BMO.TO: Quote) quarterly results disappointed investors, spurring a selloff that spread to the shares of other major banks.
BMO, the country's No. 4 bank and the first of the big lenders to report earnings, gave back 4.5 percent, to C$70.25, and had the biggest negative influence on the market.
Also weighing on sentiment, recent positive economic data out of the United States, including upbeat manufacturing numbers on Monday, revived fears the U.S. Federal Reserve might begin a scale-back, or tapering, of its monetary stimulus program sooner than later.
The Toronto stock market snapped a four-session run of gains on Tuesday. In each of the past five months, the benchmark TSX index has advanced.
"We still have the cloud of tapering hovering over the economy and the markets," said Paul Taylor, chief investment officer at BMO Asset Management. "And no doubt when we get the taper, it will be a cause for some short term negative sentiment and volatility."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 99.70 points, or 0.74 percent, at 13,319.87, after touching 13,279.08, its lowest since October 24.
Taylor expects the resource-focused Canadian market to end 2014 higher, but noted that significant headwinds remained.
"We're still struggling with relatively weak commodity prices, and our exports sector is not delivering in a meaningful way enough to bolster stronger economic growth," he said. Continued...