China data pulls TSX lower, gold miners slump

Mon Mar 24, 2014 4:48pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index slipped on Monday as disappointing economic data from China weighed on sentiment and a slump in the price of bullion sent gold-mining shares tumbling to their biggest single-day drop in more than three months.

A survey showed that China's manufacturing industry contracted in the first quarter of 2014, adding to a slew of recent data indicating that China, a big buyer of Canadian resources, is struggling to maintain growth.

Investors also digested figures showing a solid pace of growth in the U.S. manufacturing sector in the first quarter.

Shares of gold producers fell with the price of bullion as investors feared the impact of rising U.S. interest rates. <GOL/>

The Toronto stock market's benchmark index was lower after recording a 0.8 percent gain the previous week. It is still up about 5 percent this year.

"I think the market is going to go through a very uncertain period here, without much direction," said Michael Sprung, president of Sprung Investment Management.

"The economic numbers in the United States point to a strengthening economy, but the fear is that it won't take too much to stall the recovery," he added. "I don't think we're going to see much buoyancy, at least in the immediate future."

Sprung expects the Canadian market to pull back in the near term, but he is optimistic about prospects for the year in general.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch