CANADA STOCKS-TSX sinks on euro zone fears; near 2012 low

Wed May 23, 2012 11:20am EDT
 
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* 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.