4 Min Read
* TSX down 181.42 pts, or 1.6 pct, to 11,270.36 * Energy, materials sell off on Europe fears * Euro zone woes overshadow good bank earnings By Jon Cook TORONTO, May 23 (Reuters) - Toronto's main stock index fell sharply on Wednesday as mining and energy firms sank on scepticism the latest European Union summit will be able to prevent Greece from leaving the euro zone. Speculation the latest EU summit will fail to reach any substantive agreement to resolve the crisis put a screeching halt to Tuesday's rally in Toronto equities. It also drove world stocks lower and sent the euro to its weakest level since August, 2010. "People are way too concerned with Greece to be committing any money," said Mike Newton, associate director and portfolio manager at Macquarie Private Wealth Inc. All of Canada's 10 main sectors were down, led by the energy group, which fell nearly 2 percent. The heavyweight materials sector, which includes miners, also slid 1.3 percent. Oil and gas firms were hurt by another drop in oil prices, with U.S. crude slipping near $91 a barrel on Wednesday. Suncor Energy slid 2.4 percent to C$27.62, Canadian Natural Resources was down 2.1 percent at C$30.36, and Enbridge Inc was off 1.9 percent at C$40.36. Among materials issues, top fertilizer producer Potash Corp slumped 1.2 percent to C$39.49, top gold miner Barrick Gold drop 0.9 percent to C$38.11, and copper miner Teck Resources was down 2.4 percent at C$29.27. Newton said a reduction in capital expenditures by some of the world's top mining firms over the next 12 to 18 months was also having "a ripple effect" on Canadian mining shares. At 10:45 a.m., the Toronto Stock Exchange's S&P/TSX composite index was down 181.42 points, or 1.6 percent, to 11,270.36, near its 2012 low of 11,256.72. Separately, the World Bank cut its economic growth forecast for China this year to 8.2 percent on Wednesday and urged the country to rely on easier fiscal policy that boosts consumption rather than state investment to lift activity. The weak global growth outlook completely overshadowed a strong start to second-quarter earnings season by Canada's top six banks. Bank of Montreal shares fell 0.5 percent to C$54.96, despite the country's fourth largest lender reporting its quarterly profit rose a stronger-than-expected 27 percent. "If the Bank of Montreal announcement had come out Friday or Monday it probably would be doing well," said Newton. "But this is only a reflection of what's going on in Europe, because those are good numbers." Overall, the influential financial group was down 1.3 percent, led by Toronto-Dominion Bank, which dipped 1.5 percent to C$76.64. Royal Bank of Canada shares fell 1.1 percent to C$51.60. Also ignored was some solid North American data on Wednesday. New U.S. single-family home sales rose more than expected in April and prices pushed higher. In Canada, retail sales bounced back in March after a weak February but the rise outside the motor vehicle sector looked soft and the figures sent mixed signals about first-quarter economic growth.