CANADA STOCKS-TSX tumbles on Europe worries despite Spain deal

Mon Jun 11, 2012 5:17pm EDT
 
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* TSX down 98.85 pts, or 0.9 pct, at 11,401.78
    * Mining and energy shares lead losses
    * Doubts linger after Spanish bank bailout

    By Jon Cook	
    TORONTO, June 11 (Reuters) - Canadian stocks fell for the
third straight session on Monday, led by energy and mining
shares, after a relief rally on the rescue package for Spain's
banks fizzled as investors worried that other euro zone
countries also will need assistance.	
    Markets initially rose after euro zone policymakers agreed
to lend Spain, the region's fourth-largest economy, up to 100
billion euros ($124.67 billion) to help prevent a run on the
banks.	
    But equity markets retreated and Spanish and Italian bond
yields rose on worries that existing bondholders could face
losses in a debt restructuring if the euro zone's permanent
bailout fund is used for the rescue.  	
    "In a bear market, which we are in, any news is perceived as
lousy news," said Barry Schwartz, vice president and portfolio
manager at Baskin Financial Services. "The market wants to see a
full-blown solution and any type of piece-meal solution is going
to be turned around and considered negative."	
    Nine of Canada's 10 main sectors finished in the red. Losses
were led by the heavyweight energy group, which fell 1.6 percent
as oil prices reversed early gains to finish down more than $1 a
barrel. 	
    Suncor Energy fell 2.4 percent to C$28.33, Canadian
Natural Resources lost 1.4 percent at C$27.70, and
Cenovus Energy skidded 1.3 percent to C$32.05.	
    The materials sector, which includes miners, fell 1.3
percent as gold mining shares slumped with bullion prices as
nervous investors opted for low-yielding government bonds.
 	
    The most influential decliners included Barrick Gold
, which dropped 1.3 percent to C$39.60, Goldcorp Inc
, off 0.8 percent at C$39.95, Potash Corp, down
1.2 percent to C$38.87, and Teck Resources, which
dropped 2.6 percent to C$31.25.	
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 98.85 points, or 0.9 percent, at
11,401.78. It retreated nearly 200 points after touching a
session high at 11,593.66.	
    Canadian financial stocks dipped 0.4 percent. Shares of
Royal Bank of Canada, the country's largest lender, slid
0.6 percent to C$49.99. Bank of Nova Scotia also fell
0.6 percent to C$51.53.	
    "We were in the midst of a severe risk-off cycle that was
kind of interrupted a little bit by the news over the weekend,
but I think now we're reverting to the risk-off scenario," said
Carlos Leitao, chief economist at Laurentian Bank Securities.	
    Banks were also hurt by uncertainty over the fate of
Greece's future in the euro zone ahead of the next round of
elections on Sunday. European finance officials have held a
series of conference calls in recent weeks on contingency plans
should Greece leave the euro, officials said.