CANADA STOCKS-TSX hits 2-week low on China worries

Thu Jul 12, 2012 4:59pm EDT
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* TSX ends down 119.17 pts, or 1 pct, at 11,425.47
    * Energy, mining shares lead index losses
    * Markets anticipate weak China GDP data

    By Jon Cook
    TORONTO, July 12 (Reuters) - Canadian stocks ended down
after hitting a two-week low on Thursday, led by energy and
mining shares, as investors worried about slower growth in top
consumer China before a key Chinese economic report.
    Investors will focus on data on China's second-quarter gross
domestic product on Friday for indications of the health of the
world's second-largest economy. Recent economic reports have
pointed to China's expansion losing steam.
    A Reuters poll showed economists expect China's growth to
have slowed to 7.6 percent, its worst performance since the
2008-2009 financial crisis. 
    "The Canadian markets today are clearly a reflection of the
concerns around what's going to come out of tomorrow's report
from China," Craig Fehr, Canadian market strategist at Edward
Jones in St. Louis, Missouri.
    Nearly all of Canada's 10 main sectors fell. The lion's
share of the drop came from the heavyweight energy and materials
groups, which both declined more than 1 percent.
    The biggest decliners included Suncor Energy, down
1.4 percent at C$28.85, Cenovus Energy, which slid 2.1
percent to C$32.57, Barrick Gold, down 1.4 percent at
C$35.17, Potash Corp, which slumped 1.2 percent to
C$44.75, and First Quantum Minerals, off 4.4 percent at
    Markets also were disappointed by prospects for new stimulus
measures in the United States. Minutes of the Federal Reserve's
June meeting, released on Wednesday, showed that the fragile
recovery might need to weaken further before policymakers take
more action. 
    "We saw the same type of reaction when the markets were
hoping for QE2, which they ultimately got," said Fehr. "The fact
that they aren't quick to do it indicates that the economy isn't
as bad as some might be expecting."
    The Toronto Stock Exchange's S&P/TSX composite index
 finished down 119.17 points, or 1 percent, at
11,425.47. The index rebounded slightly after touching
11,366.74, its lowest level since June 28.
    In Europe, fears about the world economic outlook hurt
global shares on Thursday as the euro fell to a new two-year low
and investors sought safe-haven U.S. government bonds.
    The European Central Bank said in its monthly bulletin that
growth in the 17-country bloc is weak and "heightened
uncertainty" is weighing on confidence. 
    "Right now the majority of investors do not want to get
involved with the equity markets," said John Hughes, senior
mining analyst at Desjardins Securities. "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 group."
    Canadian financials also suffered, falling 1.2 percent.
Major lenders led the slide, with Royal Bank of Canada 
down 1.2 percent at C$52.18 and Bank of Nova Scotia 
shedding 1.4 percent to C$52.32.
    In other company news, Corus Entertainment Inc 
shares sank 4.6 percent to C$22.25 on Thursday after the
Canadian television and radio company announced it had an 11
percent fall in specialty advertising revenue in its third
    One of the few positives on Thursday was TMX Group,
which edged up 0.4 percent to C$49.05 a day after a takeover of
the Canadian exchange operator, which owns the TSX, cleared its
final regulatory hurdles.