TSX drops on China, Ukraine worry; gold stocks jump

Thu Mar 13, 2014 5:09pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index fell on Thursday with almost every major sector declining as worries grew about soft economic data from China and the crisis in Ukraine.

Russia conducted military exercises near its border with Ukraine, while U.S. Secretary of State John Kerry said serious measures would be taken by the United States and Europe if the referendum on Crimea joining Russia takes place on Sunday as planned.

In China, growth in investment, retail sales and factory output slipped to multiyear lows, reinforcing concerns raised by a recent wave of weak economic figures in the world's second-biggest economy.

Data showing that the number of Americans filing new claims for unemployment benefits dropped to a three-month low last week failed to brighten the mood.

But one group, gold-mining stocks, continued its march higher, jumping 2.3 percent as investors looked for safety in bullion amid the uncertainty. The sector gained for a third straight session and is up about 35 percent since the start of the year.

Despite Thursday's decline, the Toronto stock market's benchmark index is up about 4.5 percent this year, increasing concern among some investors that the runup might result in a correction.

"Today's action seems to be driven not just by the ongoing situation in Ukraine but also this spate of soft data that continues to come out of China," said Elvis Picardo, strategist at Global Securities in Vancouver. "Those concerns are an overhang."

"Both are wildcard events that could drive the markets much lower from these levels," he added. "But conversely, if things get better, they would turn out to be classic buying opportunities."   Continued...

 
People walk by a sign displaying TSX information in Toronto, August 17, 2009. REUTERS/Mark Blinch