Resources hit as Ukraine, China fears pull TSX lower

Tue Mar 11, 2014 5:00pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index slipped on Tuesday, led by declines in natural resource shares, as worries about the political crisis in Ukraine and fears of credit instability in China weighed on investor sentiment.

Investors were concerned about the potential impact China's first domestic bond default might have on financing deals in the copper market.

As a result, the London copper benchmark dropped to a three-year low. In Toronto, shares of diversified miner Teck Resources Ltd TCKb.TO slumped 3.5 percent.

Ukraine's interim leaders formed a new National Guard and appealed to the United States and Britain for assistance against what they called Russian aggression in Crimea.

Those worries sent investors scurrying for safety in commodities such as bullion, which climbed and helped send shares of gold producers higher.

Gains in the gold-mining sector, which is up about 28 percent this year, have fueled the broader Canadian market in recent weeks. The benchmark index has gained about 5 percent in 2014, outperforming the S&P 500 .SPX.

"The market is just taking a breather," said Paul Taylor, chief investment officer at BMO Asset Management.

"I don't know where it would take its direction from for the next 6 to 8 weeks," he added. "We might be in a holding pattern until we get through March and April and see what the economic data at that point looks like."   Continued...

 
A sign displaying TSX information is seen in Toronto November 20, 2008. REUTERS/Mark Blinch