CANADA STOCKS-TSX on track for largest one-day drop in 2012

Tue May 8, 2012 2:07pm EDT
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* TSX down 233.47 pts, or 2 pct, at 11,627.19
    * Touches lowest level since Dec. 20, 2011
    * Materials fall 3.5 pct, financials down 1.6 pct
    * Greek uncertainty hurts sentiment

    By Jon Cook	
    TORONTO, May 8 (Reuters) - Toronto's main stock index was on
track for its biggest one-day plunge in six months on Tuesday,
with mining and energy shares selling off on concerns about
Greece's commitment to bailout pledges that threatened to
escalate the euro zone's debt crisis.	
    The results of weekend polls in Greece and France, in which
voters soundly rejected austerity measures, heightened the
uncertainty of the path ahead for the euro zone. 	
    Greece sank even deeper into crisis on Tuesday when a
centrist conservative party said leftist candidate for prime
minister, Alexis Tsipras, would drive the country out of the
euro with his proposal to reject an international bailout.
    The Greek drama unfolding may have implications for other
struggling euro zone nations such as Spain, which could follow
suit in rejecting harsh austerity constraints, said Gavin
Graham, president at Graham Investment Strategy.	
    "If Spain chooses to renegotiate its bonds and make foreign
bond owners eat a 75-percent haircut, which is what happened in
Greece, then effectively the French and German banking systems
are going to be under severe stress," said Graham.	
    Canadian financial firms, which have less exposure to risky
European debt holdings than their global counterparts, were down
1.6 percent. Losses were led by major lenders Royal Bank of
Canada, down 2.1 percent at C$53.87, Toronto-Dominion
Bank, off 1.8 percent at C$80.21, and Bank of Nova
Scotia, which dipped 1.7 percent to C$52.67.	
    Canadian stocks were on track for their fifth straight drop
as the heavyweight materials group tumbled 3.5 percent as miners
were hit by a sharp drop in gold and base metals prices. 
    Losses were led by top gold producers Barrick Gold 
and Goldcorp Inc. Barrick, the world's largest gold
miner, fell 2.7 percent to C$36.64 and Goldcorp sank 3.8 percent
to C$34.55.	
    "With the decline in prices you're starting to get that
cleansing process where the baby gets thrown out with the bath
water," said Arthur Salzer, executive director and chief
executive officer of Northland Wealth Management.	
    Base metals miners fell 4 percent, led by Teck Resources
, down 4.5 percent to C$32.78, and First Quantum
Minerals, off 4 percent to C$17.40.	
    At 1:35 EDT (1735 GMT), the Toronto Stock Exchange's S&P/TSX
composite index was down 233.47 points, or 2 percent,
at 11,627.19, on track for its biggest single-day drop since
Nov. 17.	
    The TSX has fallen nearly 6 percent since the beginning of
    Energy shares were down again on Tuesday, slipping 2.3
percent as Brent crude oil dipped below $112 a barrel, down more
than 6 percent so far this month. 	
    Suncor Energy, Canada's largest oil producer,
dropped 2.3 percent to C$29.51 to lead the influential sector's
losses. Canadian Natural Resources was down 3.8 percent
at C$30.43 and Encana Corp fell 2.3 percent to C$20.87.	
    In other company news, shares of Research In Motion Ltd
 rose 1.1 percent to C$11.88 after the struggling
BlackBerry maker named chief marketing and operating officers on
Tuesday ahead of the launch of its next-generation BlackBerry 10
smartphones later this year. 	
    Canadian Pacific Railway stock fell 1.5 percent to
C$73.40 after the head of U.S. hedge fund Pershing Square
Capital Management said on Tuesday that the future of Canada's
second-biggest railway should be decided by shareholder vote.