CANADA STOCKS-TSX falls sharply as EU summit worries grow

Thu Jun 28, 2012 11:20am EDT
 
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* TSX down 123.95 points, or 1.1 percent, at 11,286.99
    * Materials, financial issues lead market lower

    By Allison Martell
    TORONTO, June 28 (Reuters) - Canada's main stock index fell
sharply on Thursday as investors grew skeptical that a major
European Union summit would make progress on fixing the region's
debt crisis.
    The market was pulled down by financial issues and the
heavyweight materials group, which includes gold miners. The
price of gold slid on pessimism about the summit, which runs
Thursday and Friday.  
    "There's only two things that matter right now, it's the
summit and soccer," said Pat McHugh, Canadian equity strategist
at Manulife Asset Management.
    "People are just getting very frustrated, you know the
policy stalemate, ping pong game, indecision, whatever word you
want to use, is really wearing people down."
    At about 10:50 a.m. (1450 GMT) the Toronto Stock Exchange's
S&P/TSX composite index was down 123.95 points, or 1.1
percent, at 11,286.99.
    Royal Bank of Canada fell 2.1 percent to C$50.32,
and Toronto Dominion Bank <TD.TO was 1.6 percent lower at
C$77.81. The stocks played the biggest role of any two companies
in pulling the index lower.
    Among materials issues, Centerra Gold Inc fell 9.8
percent to C$8.91 after the Canadian miner said a
Kyrgyzstan-based independent member of its board had stepped
down. The news came one day after Kyrgyz lawmakers moved to
review Centerra's mining contract for its Kumtor gold mine.
 

    SURVEYS POINT TO TSX GAINS
    The fears about Europe overshadowed surveys suggesting a
bullish longer-term outlook for Toronto stocks.
    A Reuters poll showed that Canadian share prices are
expected to end 2012 slightly stronger, gaining in the next 12
months to erase year-to-date losses caused by the euro zone debt
crisis. 
    Separately, a survey by Russell Investments Canada found
that with worries about the European crisis pushing down
valuations, Canadian investment managers are increasingly
positive about Canadian equities. It found that 70 percent of
managers were bullish on the sector, compared with only 56
percent in the first quarter.
    In other company news, Empire Cos Ltd, parent of
grocery chain Sobeys Inc, posted higher quarterly profit and
boosted its dividend. The stock was little changed at C$54.01.