CANADA STOCKS-TSX falls as growth fears hit commodities

Thu Jun 21, 2012 11:04am EDT
 
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* TSX down 116.79 points, or 1.0 percent, at 11,642.55
    * Global growth fears hit commodity prices
    * Energy, materials stocks lead TSX lower

    By Allison Martell
    TORONTO, June 21 (Reuters) - Canada's main stock index
dropped on Thursday, led lower by energy and mining shares, as
weak economic data from the United States, China and Europe
fanned global growth fears and drove down commodity prices.
    Oil, gold and copper prices all fell after the data, which
included a report that U.S manufacturing grew at its slowest
pace in 11 months in June and hiring slowed as export demand
waned. Chinese and European factory activity also slowed.
 
    "We're seeing a bit more evidence that the global economy,
while it's still going to continue to grow, will probably do so
in a much slower fashion," said Craig Fehr, Canadian market
strategist at Edward Jones in St. Louis, Missouri. 
    "That has investors concerned. That's putting pressure on
energy and commodity prices and thus weighing on the TSX."
    At 10:30 a.m. (1430 GMT) the Toronto Stock Exchange's
S&P/TSX composite index was down 116.79 points, or 1.0
percent, at 11,642.55.
    The energy group, down 2.5 percent, and materials, down 1.8
percent, lead the Toronto market lower. The materials sector
includes heavyweight gold and base metal miners.   
    Suncor Energy fell 3.0 percent to C$28.77 and
Barrick Gold, the world's top gold producer was down
1.8 percent at C$40.31.
    Encana Corp shares dropped 6.6 percent to C$20.69.
Encana was also affected by news its capital spending would
likely exceed its cash flow for at least the next 18 months as
it accelerates its transition to more oil and liquids-rich
natural gas production. 
    The three companies played the biggest role of any stocks in
pushing the Toronto market lower.
    Commodity prices were broadly lower, with the Thomson
Reuters-Jefferies CRB Index down 0.8 percent on signs of
a slowdown in global growth.
    Business surveys showed the downturn in the euro zone's
private sector becoming entrenched, as falling new orders and
employment levels dented business confidence. 
    A similar survey of private sector activity in China
compiled by HSBC found its factory sector had shrunk for an
eighth straight month in June on weaker demand for exports.
 
    In Canada, retail sales dropped 0.5 percent in April from
the previous month, defying expectations of an increase, in
another sign that second quarter growth was disappointing.