CANADA STOCKS-TSX hits 2012 low on Greek, China fears

Mon May 14, 2012 12:01pm EDT
 
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* TSX falls 147.23 pts, or 1.3 pct, to 11,547.44
    * Index touches 2012 low
    * Energy and financial shares lead losses
    * Greek default fears weigh
    * China cuts bank reserves

    By Jon Cook	
    TORONTO, May 14 (Reuters) - Toronto's resource-heavy main
stock index tumbled to a 2012 low on Monday as Greek political
uncertainty and China slowdown fears cast a shadow over global
growth prospects, hitting resource and financial shares.	
    Greece faced a political stalemate as party leaders stuck to
entrenched positions before another round of coalition talks on
Monday, dashing hopes of a last-minute compromise to avoid a new
election and raising fears that Greece was on track to become
the first country to abandon the euro. 	
    "This massive risk aversion is hitting markets everywhere,
triggered by Europe and Greece," said Carlos Leitao, chief
economist at Laurentian Bank Securities.	
    All of Canada's 10 main sectors were in the red, led by the
heavyweight energy group, which fell nearly 2 percent. 	
    The most influential losers among oil and gas firms included
Suncor Energy, down 1.7 percent to C$28.26, Canadian
Natural Resources, off 1.4 percent at C$30.56, and
Cenovus Energy, which dropped 1.8 percent to C$32.38.	
    At 11:23 a.m. (1523 GMT) the Toronto Stock Exchange's
S&P/TSX composite index was down 147.23 points, or 1.3
percent, to 11,547.44. It earlier touched 11,516.63, the lowest
level since Dec. 19.	
    The index has fallen more than 6 percent so far this month.	
    Materials also sank 1.6 percent as mining stocks tumbled on
investors' concern about slowing growth in China, the world's
top copper consumer. 	
    China's decision on the weekend to cut the amount of cash
banks must hold as reserves, normally seen as a pro-growth move,
only served to fuel fears that the global economic outlook was
likely to worsen, sending oil, copper and gold down. 
  	
    "As the markets get worried about global growth, coming from
not just Europe but Asia as well, then natural resources in
general get hit," Leitao said.	
    Shares of top fertilizer producer Potash Corp fell
1.9 percent to C$40.20. Competitor Agrium was off 2
percent to C$81.88.	
    Agrium was also impacted after the province of Saskatchewan
said on Friday it wants Ottawa to impose conditions on
Glencore's C$6.1 billion ($6.12 billion) takeover bid
for Viterra Inc. Glencore plans to sell parts of
Viterra, the country's top grain handler, based in Saskatchewan,
to Agrium. 	
    Financial stocks sagged more than 1 percent as threats to
Greece's bailout package raised the likelihood of a default by
the debt-ravaged country. Although Canada's banking sector has
far less exposure to Greek and other euro zone debt holdings
than its global counterparts, it would still be caught in the
fallout.	
    Declines were led Royal Bank of Canada, Toronto
Dominion-Bank, and Bank of Nova Scotia, which
all fell 1.2 percent.	
    Looking ahead, Leitao said there was little data due this
week that could shake the market's negative momentum, which has
seen the TSX close lower for seven of the last eight sessions.
Though he said Canadian existing home sales data due on Tuesday
had the potential to surprise to the upside.	
    "If we have another big number that goes along the same
direction as the housing starts of last week, that could feed
into the stronger employment numbers and may suggest that the
Canadian economy is still very strong."