TSX hits 15-month low on Greece, growth fears

Mon Oct 3, 2011 5:15pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Toronto's main stock market index sank more than 3 percent on Monday, notching its lowest close since July 2010, as fears about global growth and a Greek default drove investors to the exits.

All 10 of the index's sectors were down sharply, led by energy, base-metals and financial shares as commodity prices tumbled and investors worried about the exposure of banks to European debt after Greece warned it would miss deficit-cutting targets this year.

Among the heaviest decliners, Suncor Energy (SU.TO: Quote) slid 5.5 percent to C$25.28, Toronto-Dominion Bank (TD.TO: Quote) dropped 3 percent to C$71.67, Canadian Natural Resources (CNQ.TO: Quote) fell 5.6 percent to C$29.05, and Royal Bank of Canada (RY.TO: Quote) was down 2.7 percent to C$46.78.

Canadian banks have said they have little or no exposure to Greek debt, but dropped in sympathy with their U.S. and European counterparts.

"It's no surprise that in the financial group, which is what people are most worried about, there's no such thing as decoupling," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates.

"Even though Canadian banks may be stronger, they tend to be hit along with the others."

Adding to the pessimism, figures showed global manufacturing shrank for the first time in more than two years in September, reinforcing fears of another recession despite a modest bounce in U.S. factory activity.

Slowing growth in China is a particular concern for Canada's resource-heavy market, Kumar said, noting investors will have a better sense of the market's bottom once earnings estimates are cut sufficiently to reflect a deteriorating economy.   Continued...

<p>People walk by a Bay Street sign inside the financial district in Toronto October 10, 2008. REUTERS/Mark Blinch</p>