CANADA STOCKS-TSX hits near two-week low on Europe fears

Mon Apr 23, 2012 5:21pm EDT
 
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* TSX closes down 158.33 pts, 1.3 pct, at 11,988.95
    * Touches lowest point since April 10 at 11,919.13
    * Materials, financials lead losses
    * European political turmoil weighs on markets

    By Jon Cook	
    TORONTO, April 23 (Reuters) - Toronto's main stock index
tumbled to its lowest level in nearly two weeks on Monday as
material and financial issues were hurt by weak European data
and political tensions that heightened concerns about the
region's ability to tackle its debt crisis.	
    Global stocks and the euro slumped as a Dutch political
impasse and disappointing euro zone data revived fears the debt
crisis could keep much of Europe mired in recession through the
year. 	
    "Austerity tends to not work without large political
implications as the public will tend to vote out governments
that they feel are too austere," said Arthur Salzer, chief
executive officer of Northland Wealth Management.	
    "We can see that in France and Holland in today's news as
the public will tend not to tolerate the 'medicine' necessary to
shrink debt."	
    All 10 sectors of the Canadian stock market were down
sharply. Heavily-weighted materials led the losses, falling 2.9
percent as prices for key commodities like gold and copper also
sold off.  	
    The most influential movers on the downside included Potash
Corp, which slid 2.7 percent to C$42.43, Teck Resources
, down 3.7 percent at C$35.33, and top gold producers
Goldcorp Inc, down 3.4 percent to C$39.65, and Barrick
Gold, which slid 1.7 percent to C$39.39.	
    The Toronto Stock Exchange's S&P/TSX composite index
 finished down 158.33 points, or 1.3 percent, to
11,988.95, its lowest close in nearly two weeks.	
    The index hit a session low at 11,919.13, not far from its
yearly low of 11,868.97 set on April 10.	
    The turmoil in Europe hurt the Canadian financial sector,
which sank 1 percent, dragged down by Toronto-Dominion Bank
, which slid 1.3 percent to C$82.81, and Bank of Nova
Scotia, down 0.9 percent to C$54.28.	
    "The political developments in Europe have highlighted a
pushback against austerity measures and the data out of the euro
zone disappointed and overshadowed what was an improvement in
China's flash PMI," said Fergal Smith, managing market
strategist at Action Economics.	
    The economic outlook for Europe was hurt by poor flash
Purchasing Manager's Indexes (PMIs) for April, which are a guide
to future activity. The reports for the euro zone, Germany and
France pointed to a much faster rate of economic contraction
across the debt-laden region than had been expected. 	
    After testing its April low, Smith said the TSX was now
targeting the 50 percent retracement of the October-March rally
that comes in at 11,818, for further support.	
    On the brighter side, a private sector purchasing managers
survey from China showed factories posted their best performance
this year as a measure of new business rose from multi-month
lows, though overall activity still contracted for a sixth
successive month.