CANADA STOCKS-TSX slumps on China, euro zone woes

Fri Jun 8, 2012 11:06am EDT
 
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* TSX down 55.46 pts, or 0.5 pct, at 11,536.66
    * Energy, financial shares hurt by growth fears
    * China rate cut seen foreshadowing soft data
    * Spanish bank woes intensify

    By Jon Cook	
    TORONTO, June 8 (Reuters) - Canada's main stock index fell
o n F riday, led by energy and financial shares, as markets
anticipated soft Chinese data following a surprise interest rate
cut and as euro zone debt fears intensified after major central
banks eschewed further stimulus moves.	
    Prospects of slower economic growth in Germany and China
combined with a credit rating cut for Spain brought investors
back to earth after Fed Chairman Ben Bernanke damped recent
hopes that the central bank would announce new moves to
stimulate the U.S. economy later this month. 	
    Markets became less enamored with Thursday's surprise
Chinese interest rate cut, which was viewed as foreshadowing
soft Chinese data due over the weekend.	
    "People are starting to talk about how China cut because
they are panicking," said Sid Mokhtari, market technician and
director, institutional equity research, at CIBC World Markets.
"Down the road that would be a good thing, but right now it's a
negative message to the market."	
    Nine of Canada's 10 main sectors were in the red. Losses
were sharpest among the oil and gas group, which slid 1.2
percent as oil prices tumbled. 	
    The most influential decliners among energy firms, including
Canadian Natural Resources, which slipped 2.2 percent
to C$28.15, Enbridge Inc, down 1.4 percent to C$38.81,
and TransCanada Corp, off 1.1 percent at C$42.69.	
    Financial shares, down 0.4 percent, were shaken in the
aftermath of a further downgrade by Fitch of Spain's sovereign
credit rating, which dropped to BBB from A on Thursday.	
    Toronto-Dominion Bank fell 0.4 percent to C$78.75,
Bank of Montreal was down 1 percent at C$54.55 and Bank
of Nova Scotia sank 0.4 percent to C$52.57.	
    Spain is expected to request European aid for its ailing
banks over the weekend to forestall worsening market turmoil,
becoming the fourth and biggest country to seek assistance since
the euro zone's debt crisis began, EU and German sources said.
 	
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 55.46 points, or 0.5 percent, at 11,536.66.
Despite the turbulence it was still on track for a weekly gain.	
    One of the few bright spots was the performance of the
sub-index of gold mining stocks, which climbed 0.3 percent after
tumbling on Th ursday after Bernanke's comments splashed cold
water on stimulus speculation.	
    Barrick Gold led gains, up 1 percent at C$40.20.
The world's largest gold producer had fallen earlier in the week
after it surprised investors by firing Chief Executive Aaron
Regent. 	
    Mohktari said the highly oversold state of the majority of
Canadian resource shares signaled a summer rally was likely. 	
    "Most of the indicators that you follow from a momentum
perspective are getting to the low end of the range, which means
you're going to be able to find a rally out of this mess,"
Mokhtari said.	
    On Friday, Canadian data showed a cooling in May in the jobs
and housing markets from robust April gains.	
    Canada's unemployment rate held steady in May as the economy
created a negligible 7,700 jobs, snapping a two-month hiring
spree that yielded the biggest employment gains in three
decades. Housing starts slowed in May to 211,400 at a seasonally
adjusted annualized rate, down from 243,800 units in
April. 	
    In other company news, shares of Genivar Inc. 
tumbled more than 5 percent to C$23.67 after the engineering
firm received a green light to acquire British consulting firm
WSP Group Plc in a cash deal valued at approximately C$442
million ($431.5 million).