CANADA STOCKS-TSX hits 7-month low on global selloff

Fri May 18, 2012 5:11pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX ends down 50.04 pts, or 0.4 pct, at 11,280.64
    * TSX hits lowest level since Oct. 5 at 11,256.72
    * Financial shares hurt by euro zone woes
    * Gold miners, energy shares rise with gold, gas prices
    * Disappointing Facebook debut hurts sentiment

    By Jon Cook	
    TORONTO, May 18 (Reuters) - Canadian stocks hit a
seven-month low on Friday, erasing early mining and energy gains
as concerns about Europe's deepening debt woes and after
Facebook's disappointing market debut fueled a flight to
    Nearly all of Canada's 10 main sectors finished in the red.
Losses were led by the heavyweight financial group, which fell 1
percent as fears about Greece leaving the euro zone and Spain's
fragile banking sector came back into focus as global equity
markets tumbled in the afternoon. 	
    Royal Bank of Canada shares fell 0.5 percent to
C$51.70, Bank of Nova Scotia was down 1.2 percent to
C$51.11, Toronto-Dominion Bank slipped 0.9 percent to
C$76.94 and insurer Sun Life Financial shed 1.9 percent
to C$20.92.	
    Manulife Financial Corp's shares slumped 1.5
percent to C$10.99 after a report put Canada's top insurer among
a group of suitors expected to place first-round bids to buy ING
Groep's Asia life insurance unit in a deal worth about $6.5
billion to $7 billion. 	
    A sloppy debut by Facebook Inc spoiled hopes that a
spectacular open for the most-anticipated stock sale in years
would brighten the mood in what has been a gloomy month for
    "There was a negative aspect thrown onto the market by this
whole deal," said Fred Ketchen, director of equity trading at
ScotiaMcLeod. "From there it was just a case of reacting to the
disappointment to the issue, the disappointment of the day, the
disappointment of the week and the market is down."	
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 50.04 points, or 0.4 percent, at
11,280.64. It touched 11,256.72, its lowest level since Oct. 5.	
    The TSX finished the week down 3.5 percent - its biggest
weekly drop since the end of November. It has fallen 8.5 percent
in May as conditions in Europe have unraveled.	
    A ratings downgrade of 16 Spanish banks by Moody's Investors
Service on Thursday raised investor fears the sector may need a
bailout that would strain Madrid's already stretched finances.
    In addition, a weekend meeting of the Group of 8 major
industrial economies may have made some investors wary of
holding positions open until Monday.	
    Germany's finance minister, Wolfgang Schaeuble, one of
Greece's harsher critics, said market unrest fueled by the euro
zone debt crisis could last another year or two. 	
    "There's a lot of talk about what the downgrades are going
to bring from the banking sector in the European community so
people are still sitting on the sidelines," said Sid Mokhtari,
director of institutional equity research at CIBC World Markets.
"Investors are still expecting darker days ahead."	
    Losses were capped by gold miners and energy firms, which
rose with a rebound in gold and natural gas prices.  	
    Friday's most influential gainers included New Gold Inc
, up 4.8 percent to C$8.36, First Quantum Minerals
, up 1.4 percent to C$17.48, Yamana Gold, up 1.1
percent at C$13.94, Eldorado Gold, which climbed 1
percent to C$11.12, and Pacific Rubiales Energy Corp,
which jumped 2.6 percent to C$25.93.	
    In other news, shares of Canadian Pacific Railway 
tumbled 3.1 percent to C$74.11 following a boardroom shakeup on
Thursday at Canada's second largest railway, spurred by a brash
New York hedge fund that analysts said could be a warning signal
for other members of the Canadian corporate establishment.