CANADA STOCKS-TSX sinks to 7-month low on Greece fears

Tue May 15, 2012 5:32pm EDT
 
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* TSX ends down 145.48 pts, or 1.3 pct, at 11,343.05
    * Touches 11,325.71, lowest level since Oct. 5
    * Energy, mining shares lead losses
    * Greek turmoil weighs on markets
    * Losses pared on strong German, Canadian data

    By Jon Cook	
    TORONTO, May 15 (Reuters) - Canadian stocks sank to a
seven-month low on Tuesday as resource shares continued their
May sell-off after Greece said it would hold new elections,
heightening concern about its possible exit from the euro zone
and the spillover effect on global markets.	
    Greece's president said the country will hold new elections
after politicians again failed to agree on a new government,
sparking fears that left-wing politicians opposed to Greece's
international bailout terms could win the June elections.
 	
    The broad index fell more than 1 percent, with Canadian
resource firms the hardest hit. Materials tumbled 3.4 percent,
and energy shares slipped 1.8 percent. Gold miners paced losses,
with many top producers falling in excess of 3 percent as
bullion prices hit a four-month low. 	
    "You've got a combination of profit taking with uncertainty
and that makes for a bit of a pullback," said Philip Petursson,
managing director, portfolio advisory group at Manulife Asset
Management.    	
    Industry heavyweight Barrick Gold fell 3.8 percent
to C$35.23, Goldcorp Inc was down 2.4 percent at C$32.75
and Eldorado Gold dropped 5 percent to C$10.38.	
    Teck Resources was off 4.1 percent at C$30.40.	
    On the energy side, losses were led by Canadian Natural
Resources, which fell 2.7 percent to C$29.44 a day
after the Alberta government charged the oil and gas producer
with releasing poisonous hydrogen sulfide gas from its Horizon
oil sands plant two years ago and failing to report the
incident. 	
    Suncor Energy, Canada's largest oil producer,
dropped 1.1 percent to C$27.67, as U.S. crude prices fell for a
third straight session. 	
    "The flavor of the day is not to own resources, not to own
risk stocks," said Michael Simpson, senior portfolio manager at
Sentry Select Capital Corp.	
    The Toronto Stock Exchange's S&P/TSX composite index
 finished down 145.48 points, or 1.3 percent, at
11,343.05. It touched a session low at 11,325.71, its lowest
level since Oct. 5.	
    It was the ninth time in the last 10 sessions that the index
closed lower; the index has fallen 8 percent so far this month.	
    With earnings season nearly over and a dearth of major
economic data to "move the needle" in a positive direction,
Petursson said the market slide was likely to continue.	
    "There isn't any reason to think that all of a sudden we'll
just turn around and shoot higher," he added.	
    Financial shares slumped 0.5 percent on Tuesday on the
latest bout of political instability in Greece and after Italian
and Spanish 10-year yields hit 6 percent. 	
    "Greece at the moment appears ungovernable," said Simpson.	
    While there was some good news from Germany, the euro zone's
largest economy, with data showing the economy grew 0.5 percent
in the first quarter of 2012, it was largely offset by a survey
of German analyst and investor sentiment that deteriorated
sharply in May. 	
    Toronto-Dominion Bank was the most influential
decliner, down 1 percent to C$79.13. Top insurer Manulife
Financial fell 3 percent to C$11.64.	
    Helping counter the negative market tone was Canadian data
that showed existing home sales edged up 0.8 percent in April
from March and were up a strong 11.5 percent from a year
earlier. 	
    U.S. data on Tuesday was mixed, with weak retail sales in
April offset by a better-than-expected increase in factory
activity in New York state. 	
    In individual company news, shares of Research in Motion
 fell 5.6 percent to C$11.18. A survey on Tuesday showed
the BlackBerry maker's market share dwindling as rival handset
makers using Google's Android smartphone software
proliferate. After the market close, investor Greenlight Capital
Inc disclosed it cut its stake in RIM by 45.3 percent to 1.6
million shares.