CANADA STOCKS-TSX tumbles on global growth fears

Fri Jun 1, 2012 11:34am EDT
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* TSX down 155.14 pts, or 1.3 pct, at 11,358.07
    * Energy, financial shares lead losses
    * Gold miners gain from safe-haven buying

    By Jon Cook	
    TORONTO, June 1 (Reuters) - Canada's main stock index
slumped on Friday, led by energy and financial issues, after a
slew of weak data - including reports showing lackluster U.S.
jobs growth and Canadian economic expansion - compounded fears
of slowing global growth. 	
    After one of the worst Mays in recent years for equity
markets, June began with a whimper, amid a backdrop of euro zone
debt worries, a tentative recovery in the United States and a
more moderate pace of growth in China.	
    Markets extended losses after U.S. job growth in May was the
weakest in a year, suggesting a faltering U.S. economic
    The market declines spurred speculation the European Central
Bank and U.S. Federal Reserve may be forced to implement
additional stimulus measures to calm investors on both sides of
the Atlantic.	
    "It's pretty dramatic times," said Paul Hand, managing
director at RBC Capital Markets. "A policy response is probably
going to be called for here, including concerted action with the
Fed and quantitative easing."	
    Nine of Canada's 10 main sectors were in the red. Losses
were sharpest among the oil and gas group, which dropped 3.3
percent as U.S. light crude oil fell more than $3 per barrel on
    Declines were led by Canadian Natural Resources,
down 4.4 percent at C$28.35, Suncor Energy, off 2.6
percent to C$27.30 and Cenovus Energy, which dropped
3.8 percent to C$31.32.	
    At 11:02 a.m. (1502 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 155.14 points, or 1.3
percent, at 11,358.07, close to a 10-day low.	
    Earlier data from France and Germany, Europe's largest
economy, showed their manufacturing sectors contracted at the
fastest pace in nearly three years. Italy's factories also
contracted for a tenth straight month, while in Spain the PMI
fell below that of Greece's.	
    Greece, which unleashed the financial maelstrom that has
ravaged the euro bloc, is due for a crucial second election in
three weeks that may determine whether it remains a member of
the currency union. 	
    Canadian financials, which have far less exposure to risky
euro zone debt holdings, still tumbled 2.6 percent on Friday.
Despite solid second-quarter bank earnings, Canada's top lenders
led the slide.	
    Royal Bank of Canada sank 3.3 percent to C$49.86,
Toronto-Dominion Bank was down 2.7 percent at C$76.90
and Bank of Nova Scotia shed 2.2 percent to C$51.81.	
    Data on Friday showed the Canadian economy grew less in the
first quarter than the Bank of Canada had expected. The soft GDP
data tempered speculation of an interest rate
    The negative global news was a boon to gold stocks, which
jumped 5.5 percent as bullion rallied above $1,600 an ounce on
safe-haven buying. Gains were led by top gold producers
Barrick Gold, up 6.4 percent at C$43.23, and Goldcorp
Inc, which rose more than 8 percent to C$40.76.	
    RBC Capital Markets' Hand said the sell-off was likely to
slow, as yields on government bonds and U.S. Treasuries plunged
to historic lows.  	
    "As rates go lower and markets go lower, there will be money
coming out of bonds to buy stocks," said Hand.