TSX slides as ECB, Germany deflate euro zone hopes

Thu Dec 8, 2011 5:13pm EST
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By Jennifer Kwan

TORONTO (Reuters) - Canadian stocks ended lower on Thursday after the head of the European Central Bank offered a bleak outlook for Europe's financial markets and did not signal more aggressive action to ease the region's debt crisis.

And in an ominous sign heading into an EU summit on Friday, Germany rejected draft proposals that would increase the euro zone's firepower in dealing with the credit crisis, triggering a steep selloff in global stocks.

"The main concern is what happens in Brussels, so people are quite nervous," said Irwin Michael, portfolio manager at ABC Funds. "We need some constructive news coming out of Europe."

Toronto's heavyweight materials sector fell 2.4 percent as the price of gold and base metals dropped sharply.

Fertilizer producer Potash Corp (POT.TO: Quote) sank 4.8 percent to C$41.96 and played the biggest role of any stock in leading the sector and market lower.

Other heavily weighted issues on the downside included Barrick Gold (ABX.TO: Quote), down 1.9 percent at C$50.82, and Goldcorp (G.TO: Quote), which sank 1.7 percent to C$51.65.

Energy stocks also slid, hurt by a 2 percent drop in oil prices.

Suncor Energy (SU.TO: Quote) was the biggest drag on the sector, falling 3.2 percent to C$29.54, helping push down the broader energy sector by 2.5 percent. Canadian Natural Resources (CNQ.TO: Quote) sank 3.1 percent to C$37.08.   Continued...