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TORONTO (Reuters) - Canadian stocks retreated for a fourth straight session on Thursday with resource-related shares hurt by a commodities market that was softened by persisting worry over the euro zone debt crisis and sluggish Chinese economic data.
Gold miners continued to drop as bullion prices stayed near 2-1/2 month lows and were on track for the first monthly fall since September. <GOL/>
"Metals are basically sloppy," said Paul Hand, managing director at RBC Capital Markets. "(Investor) enthusiasm is low.
"There's nothing in the news flow that's startling and the malaise continues."
The Toronto Stock Exchange's subindex of gold mining stocks .SPTTGD lagged the broader index, falling more than 1.5 percent. Its negative momentum was the biggest drag on the market's heavyweight materials sector, which dropped 1.2 percent.
The Toronto Stock Exchange's main S&P/TSX composite index .GSPTSE ended down 38.63 points, or 0.3 percent, at 11,504.42, its lowest close since November 28.
Energy-related shares dropped as U.S. crude oil futures fell more than $1 to $93.87 a barrel. <O/R> Suncor Energy (SU.TO) was down nearly 2 percent at C$27.59 to lead the sector's losses.
The mood among investors wasn't helped by a warning from International Monetary Fund Managing Director Christine Lagarde that no country is immune to the "escalating" euro zone crisis, which she said threatens to spiral into a global depression.
The TSX index's financial sector, despite having little exposure to European debt, was down slightly, led by Toronto-Dominion Bank (TD.TO), which fell nearly 1 percent to C$71.85.
The TSX opened higher on better than expected U.S. jobs data as new applications for unemployment insurance fell to a 3-1/2 year low, suggesting the U.S. economy was gaining speed.
That optimism was offset by Chinese economic data that showed China's factory output will shrink again in December, adding to the headwinds facing a global economy struggling with sluggish U.S. growth and the euro zone's problems.
"The (China) economic data continues to suggest a soft landing rather than the resumption of vigorous growth," Hand said.
The economic gloom surrounding the euro zone eased slightly after first estimates of European Purchasing Manager's Indexes in December showed a slight improvement over November but the numbers still pointed to an economic contraction ahead.
The Chinese and European data were not good news for the commodities-heavy TSX as China is the world's largest buyer of base metals, and Europe is China's largest trading partner, so a slowdown in either region would affect Canadian resource companies.
Thin trading volumes also helped extend the market's week-long slide.
"Volume-wise it's a very slow day, so if you have any seller and no buyer then down we go," said John Hughes, a mining analyst at Desjardins Securities.
Editing by Peter Galloway