China data drags TSX to one-week low

Fri Jan 3, 2014 4:47pm EST
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By John Tilak

TORONTO (Reuters) - Canada's main stock index slipped on Friday to its lowest in a week, with sluggish economic data from China weighing on investor sentiment and causing declines in the heavyweight financial, materials and energy sectors.

A government survey showed that growth in China's services sector dropped to a four-month low in December as business expectations fell, adding to figures released earlier this week indicating weakness in the country's manufacturing industry.

After recording a 9.6 percent gain in 2013, the Toronto market declined for a second straight session.

"It's a little bit of a reality check. It probably reflects some position shifting as we begin the new year," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

"Despite the weak start to the year, I don't think anything fundamental has changed in the outlook for equities."

Investors also paid attention to the U.S. Federal Reserve, whose monetary stimulus helped fuel global equity markets last year.

Ben Bernanke, in what could be his last speech as Fed chairman, said the U.S. central bank is no less committed to highly accommodative policy now that it has trimmed its bond-buying stimulus.

"The markets don't want to see aggressive Fed action," Picardo said. "A lot depends on what the pace of the scaling down is going to be going forward."   Continued...

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch