CANADA STOCKS-Fed, RBC drive TSX to worst day in 4 weeks

Tue Apr 3, 2012 5:07pm EDT
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* TSX ends down 183.45 points, or 1.5 percent, at 12,323.61
    * Fed minutes indicate stimulus less likely
    * RBC, gold shares, RIM down sharply

    By Claire Sibonney	
    TORONTO, April 3 (Reuters) - Toronto's main stock index
marked its biggest one-day drop in four weeks on Tuesday, on
lowered expectations for more U.S. central bank stimulus,
tumbling commodities and slipping shares of Royal Bank of Canada
, accused by U.S. regulators of running a trading scheme
"of massive proportion." 	
    RBC was the most influential decliner, down 2.8 percent to 
C$57.10 following a lawsuit filed on Monday by the Commodity
Futures Trading Commission.	
    The lawsuit alleges that a small group of senior RBC
employees created and managed a "wash trading" strategy in which
they improperly coordinated buying and selling of stock futures
by bank subsidiaries, without them taking a position in the
market, in order to gain the Canadian tax credits. RBC has
called the claims "absurd."  	
    "Certainly RBC has had some impact here ... it could
potentially be significant in terms of the fines they could
incur," said Michael Sprung, president at Sprung and Co.
Investment Counsel, an RBC shareholder.	
    "Maybe the market is a little bit ahead of itself in
penalizing the company to the extent that it has."	
    Canadian stocks underperformed Wall Street significantly on
Tuesday. Financials were down 1.3 percent, materials
knocked off 3.1 percent and energy shares lost 1.6 percent.	
    Stocks had extended earlier losses after minutes from the
latest U.S. central bank meeting showed Federal Reserve
policymakers appear less keen to launch a fresh round of
monetary stimulus as the U.S. economy improves. 	
    "The market got excited about the prospect that the Fed
might provide further hints towards quantitative easing and it
didn't get that, so there's been a backlash because of that and
we're seeing asset markets in general sell off," said Fergal
Smith, managing market strategist at Action Economics.	
    The Toronto Stock Exchange's S&P/TSX composite index
 was finished down 183.45 points, or 1.47 percent, at
12,323.61. Earlier, the index hit a low of 12,284.61, notching
its biggest one-day decline since Mar. 6.	
    Other heavy laggards included gold and energy shares as
bullion and oil prices fell in the wake of the Fed minutes.
Goldcorp Inc plunged 5.8 percent to C$43.10, Barrick Gold
 lost 3 percent to C$42.53 and Suncor Energy was
down 1.4 percent to C$32.74.	
    Research in Motion sank 9.4 percent to C$12.91,
after a Dutch semiconductor company said it had filed a patent
infringement suit against the troubled BlackBerry maker.