TSX posts steepest loss in 2 weeks as commodities
By Claire Sibonney
TORONTO (Reuters) - Toronto's main stock index tumbled nearly 200 points on Wednesday, its biggest drop in two weeks, as mining and energy shares were hit by a stronger U.S. dollar and weaker commodity prices.
Trading was thin after a two-day Christmas holiday and that may have exaggerated the index's move.
A safe-haven rally in the U.S. dollar <FRX/> on a spike in European debt jitters and worries about the fate of the global economy in 2012 pressured greenback-priced commodities, including oil, gold, silver and base metals, which in turn hit Canadian resource-related shares.
The index's mining-heavy materials group sank 4.2 percent.
Among the weightiest decliners, Goldcorp (G.TO: Quote) dropped 4.7 percent to C$43.56, Barrick Gold Corp (ABX.TO: Quote) lost 3.6 percent to C$45.26, and Potash Corp (POT.TO: Quote) was down 3.6 percent at C$41.90.
"The European situation is not anywhere close to being solved and it's going to require a lot of moves by governments and banks," said Sal Masionis, stockbroker at Brant Securities. "The problem is when you have 17 countries that have to agree to things, it will take ages, and meanwhile markets don't wait for governments.
"The tax loss selling is over in Canada ... but there are very few bids around on the buy side. It's a very illiquid market and when you have people dumping, it certainly is not very good."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 198.26 points, or 1.66 percent, at 11,728.41. Eight of the index's 10 sectors were weaker, including financials, which were down 0.8 percent. Continued...