TSX slides as Greek woes hit commodities

Fri Feb 10, 2012 4:43pm EST
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By Jennifer Kwan

TORONTO (Reuters) - Canada's main stock index sank to a two-week low on Friday and notched its first weekly drop in eight weeks as doubts grew that Greece's debt bailout deal would win final European approval.

The jitters sparked a drop in commodity prices and global equity markets. The Toronto index's mining-heavy materials sector fell 1.2 percent as gold and base metals prices weakened. Among the miners, Teck Resources TCKb.TO fell 1.4 percent to C$40.24 and Barrick Gold (ABX.TO: Quote) dropped 1.3 percent to C$48.25. <GOL/> <MET/L>

Among oil and gas shares, Canadian Natural Resources (CNQ.TO: Quote) fell 1.4 percent to C$37.75 and Suncor Energy (SU.TO: Quote) was down 2.1 percent at C$33.87 as crude prices plunged on the renewed euro zone woes. Also pushing down the sector, the International Energy Agency cut its oil demand forecast for a sixth consecutive month due to a weak global economy.<O/R> The Toronto index's energy sector fell 1.3 percent.

Combined, the materials and energy sectors make up around 40 percent of the TSX index.

Final approval of Thursday's long-awaited Greek debt deal remained elusive, with fresh political wrangling injecting more uncertainty and keeping alive the risk of a debt default.

"The market is left hanging here with the sense that things could unravel," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services. "That's really where we are. I don't know if this is anything different today than it was yesterday or six months ago. But the market has decided to focus its energy on the negative stuff."

He added that given the market's strong start to the year, "it's time to lock in some profits."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed 108.52 points, or 0.87 percent, lower at 12,389.42, with all 10 of its main sectors dropping. The index fell as low as 12,328.92 during the session, its weakest level since January 25.   Continued...