CANADA STOCKS-TSX sinks as growth fears intensify

Fri Jun 1, 2012 4:42pm EDT
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* TSX ends down 152.01 pts, or 1.3 pct, at 11,361.20
    * Energy, financial shares lead losses
    * Gold miners gain from safe-haven buying

    By Jon Cook	
    TORONTO, June 1 (Reuters) - Canadian stocks tumbled on
Friday, led by energy and financial issues as economic data on
both sides of the Atlantic raised fears of a global slump and
sent investors out of riskier assets into gold and other safe
    After one of the worst Mays in recent years for equity
markets, June began badly on a backdrop of euro zone debt
worries, a tentative recovery in the United States and more
moderate growth in China.	
    Markets extended losses after U.S. jobs growth in May was
the weakest in a year, suggesting a faltering U.S. economic
    "Today's jobs number was just the tipping point and the
markets just went into full pessimism mode," said Philip
Petursson, managing director of the portfolio advisory group at
Manulife Asset Management.	
    Nine of Canada's 10 main sectors finished in the red. Losses
were sharpest among the oil and gas group, which dropped 3.3
percent as U.S. crude oil futures settled at its lowest level in
nearly eight months. 	
    Declines were led by Canadian Natural Resources,
down 3.7 percent to C$28.56, Cenovus Energy, off 4.7
percent at C$31.03, and Enbridge Inc, which sank 3
percent to C$39.60.	
    Petursson said Canada's energy index, down almost
15 percent since the beginning of May, has been hurt by
speculators getting out of the oil trade as prices fall.	
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 152.01 points, or 1.3 percent, at
11,361.20. It was down 1.9 percent for the week.	
    The sell-off was compounded by dreary global manufacturing
data. China's slowdown worsened in May as its factories saw a
further deterioration in demand at home and abroad. In Europe,
the euro zone manufacturing index reached its lowest level since
June 2009, and British manufacturing activity shrank at its
fastest pace in three years. 	
    A U.S. manufacturing gauge showed national factory activity
slipped to 53.5 from 54.8 in April. 	
    The 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
    "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."	
    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
    Canadian financials, which have far less exposure to risky
euro zone debt holdings than their global counterparts, still
tumbled 2.8 percent on Friday. Despite solid second-quarter bank
earnings, Canada's top lenders led the slide.	
    Royal Bank of Canada sank 3 percent to C$49.99,
Toronto-Dominion Bank was down 2.8 percent at C$76.88
and Bank of Nova Scotia shed 3 percent to C$51.40.	
    The negative global news was a boon to gold stocks, which
jumped nearly 7 percent as bullion rallied above $1,600 an ounce
on safe-haven buying. Gains were led by top gold
producers Barrick Gold, up 7.5 percent at C$43.65 and
Goldcorp Inc, which rose 8.6 percent to C$40.93.	
    "On a day like today you're either buying U.S. Treasuries or
you're buying gold," said Petursson.