CANADA STOCKS-TSX hits 2-week low after Fed; China data eyed

Thu Jul 12, 2012 11:39am EDT
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* TSX down 143.04 points, or 1.2 percent, at 11,401.60
    * Mining, energy shares lead index losses
    * Fed signals no stimulus moves in near term
    * Oil and metals lower as China GDP data awaited

    By Jon Cook
    TORONTO, July 12 (Reuters) - Canada's main stock index
touched a two-week trough near midday on Thursday, led lower by
mining and energy shares, after the U.S. Federal Reserve
dampened speculation of further stimulus measures and as markets
were cautious ahead of China GDP data.
    Minutes from the latest Federal Open Market Committee
meeting, released on Wednesday, indicated more stimulus is
unlikely in the near future despite recent data showing slower
growth in Europe, China and the United States. 
    While the prospect of no new Fed action weighed on
commodities, the main focus in Canada was on Friday's release of
second-quarter growth figures from China.
    A Reuters poll showed economists expect China's growth to
have slowed to 7.6 percent in the second quarter, its worst
performance since the 2008/09 financial crisis. 
    "On the materials side, there's no expectation of an
outperformance," said John Hughes, senior mining analyst at
Desjardins Securities. "Until we change the sentiment, we can't
go higher."
    The heavily weighted materials sector, which includes
miners, fell for the second straight day, tumbling 2.3 percent.
Losses were led by top gold producers Barrick Gold,
down 2.3 percent at C$34.85, and Goldcorp Inc, which
dropped 3.2 percent to C$32.72.
    Other miners on the downside included Potash Corp,
which sank 1 percent to C$44.86, First Quantum Minerals,
off 5.5 percent at C$16.85, and Teck Resources, which
slid 2.3 percent to C$29.85.
    Around 11:25 a.m. EDT (1525 GMT), the Toronto Stock
Exchange's S&P/TSX composite index was down 143.04
points, or 1.2 percent, at 11,401.60. The index touched
11,366.74, its lowest since June 28.
    The oil and gas sub-index fell nearly 2 percent as U.S. oil
prices slid, despite U.S. data that showed new jobless claims
fell to the lowest level in four years.  
    The biggest energy names on the downside were Suncor Energy
, down 1.4 percent at C$28.84, Canadian Natural Resources
, which dipped 2 percent to C$25.93, and Cenovus Energy
, off 1.9 percent at C$32.63.
    In the euro zone, various member nations faced obstacles
getting their own people on board the bloc's policies to
overcome its debt crisis, which boded ill for investor risk
    Germany will need a few months to decide whether the
European Union's bailout fund and fiscal pact are legal under
its laws, while Spain faced violent protests in Madrid after it
unveiled new austerity measures. 
    "Right now the majority of investors do not want to get
involved with the equity markets," said Hughes. "Until we
stabilize the situation in Europe, it's very difficult to expect
we would see the beginning of any new cycle in the commodities
    Canadian financials also suffered, falling 0.8 percent.
Major lenders led the slide, with Royal Bank of Canada 
down 0.8 percent at C$52.35 and Bank of Nova Scotia 
shedding 1 percent to C$52.53.
    One of the few positives on Thursday was TMX Group,
which edged up 0.3 percent to C$48.99 a day after a takeover of
the Canadian exchange operator, which owns the TSX, cleared its
final regulatory hurdles.