CANADA STOCKS-China growth fears spook TSX shares

Tue Jul 10, 2012 4:56pm EDT
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* TSX ends down 122.45 pts, or 1 pct, at 11,512.22
    * Materials, energy sectors fall 2 pct
    * Weak China import data hurts commodity prices
    * Spanish bank deal helps pare losses
    * RIM falls 4 pct after shareholders meeting

    By Jon Cook
    TORONTO, July 10 (Reuters) - Canada's main stock index hit a
July low on Tuesday, sliding with mining and energy shares, as
growing fears about China's economy outweighed optimism that
euro zone policymakers were taking steps to tackle the region's
debt crisis.
    Investors fretted about a hard landing for the world's
second largest economy after data on Tuesday showed Chinese
import growth slowed sharply in June to 6.3 percent, well short
of the forecast for a 12.7-percent increase. 
    The news was not a good harbinger for China's first-half GDP
data expected later this week.
    "The data from China was rather disturbing," said Pat
McHugh, Canadian equity strategist at Manulife Asset Management.
"Imports declined by about half and export growth declined."
     Canada's heavily-weighted materials sector, which includes
miners, sank 2.7 percent. The equally influential oil and gas
group slid 2 percent.
    "We haven't really seen commodities do much of anything
except slip," said McHugh.
    The biggest drags on the market included: Barrick Gold
, off 2.6 percent at C$36.37; Goldcorp Inc, which
shed 2.1 percent to C$37.63, Potash Corp, fell 1.9
percent to C$44.97; Cenovus Energy, down 2 percent at
C$32.25, and Canadian Natural Resources, which dipped
1.8 percent to C$25.84.
    The Toronto Stock Exchange's S&P/TSX composite index
 finished down 122.45 points, or 1 percent, at
11,512.22. The index at one point hit 11,492.36, its lowest
since June 29.
    Investors have been hoping the recently weak economic data
in China and the United States would spur increased stimulus
action from their central banks. Last week China cut interest
rates for the second straight month.
    On Tuesday, St. Louis Federal Reserve Bank President James
Bullard told an audience in London that the U.S. economy is
still some way from needing more asset-buying stimulus.
    The China data overshadowed some progress in Europe's battle
to control its debt crisis.
    Spanish bond yields backed off the critical 7 percent level
after euro zone finance ministers agreed to release the first 30
billion euros ($37 billion) of bailout funds for Spain's
troubled lenders by the end of July. 
    Market watchers were also optimistic Germany's top court
would ultimately approve the European Union's new permanent
bailout fund, enabling a more flexible use of the latest rescue
    Canadian financial shares initially rose, but ended down 0.3
percent as euro zone efforts failed to assuage concerns about
the region.
    Losses were led by Bank of Nova Scotia, down 0.9
percent at C$52.50, Canadian Imperial Bank of Commerce,
which fell 0.7 percent to C$71.50, and Royal Bank of Canada
, off 0.2 percent at C$52.48.
    In the United States, Wall Street was hurt by some profit
warnings from technology companies as second-quarter earnings
season kicked off. Chipmakers Advanced Micro Devices and
Applied Materials Inc slashed their revenue outlooks
due to weaker global demand. 
    With few companies reporting right now, McHugh said the
negative initial results were likely to be exaggerated.
    "Three weeks from now there's going to be a ton, so there
will be lots of things to divert investors' attention."
    Canada's far smaller technology sector dipped 2 percent.
Research In Motion Ltd tumbled more than 4 percent to
C$7.44 on Tuesday as the beleaguered maker of the BlackBerry
held its annual shareholder meeting, with Chief Executive
Thorsten Heins promising to turn RIM into a "lean, mean hunting
    RIM recently posted its first operating loss in eight years
and has delayed the planned launch of the next-generation
BlackBerry 10 until early next year.
    "Their new BlackBerry 10 might be the best product known to
man, but it can't come out fast enough to satisfy the consumer,"
said Barry Schwartz, vice president and portfolio manager at
Baskin Financial Services.
    "RIM is going the way of the Betamax and the other
technologies that could not catch up with the changing whims of