3 Min Read
* TSX down 107.52 points, or 0.9 percent, at 11,902.27 * Global growth worries weigh on investors * Shares of most banks fall despite solid results By Alastair Sharp TORONTO, Aug 30 (Reuters) - Canadian stocks dropped sharply on Thursday morning as investors fretted about the state of the global economy and how central banks might deal with it, brushing off surprisingly robust earnings from three of the country's big banks. All but one of the benchmark index's main sectors were lower as investors increasingly looked beyond what U.S. Federal Reserve Chairman Ben Bernanke may hint at in a key speech on Friday and turned their attention to a meeting of the European Central Bank next week. "Europe is the problem, and that's where we need some solutions for other places around the world to feel more comfortable," said Gareth Watson, vice-president for investment management and research at Richardson GMP. Financial stocks were among the biggest weights even though three big Canadian banks reported better-than-expected results and dividend increases on Thursday. Toronto-Dominion Bank was down 0.9 percent at C$80.78 even though it narrowly beat expectations for quarterly profit and raised its dividend by more than expected. Canadian Imperial Bank of Commerce dropped 0.8 percent to C$75.75 even as it said profit rose 42 percent on higher lending volumes. But Royal Bank of Canada, the country's largest lender, bucked the trend, jumping 1.3 percent to C$55.32 after it announced a surprise hike in its dividend on the back of a 73 percent rise in profit. However, Bank of Nova Scotia fell 2.4 percent to C$52.32 after it said late on Wednesday it would buy ING Groep's Canadian online bank for C$3.1 billion. "On the whole, the core Canadian banking franchises are still relatively stable and intact," Watson said. "Credit quality is not deteriorating too quickly, although in this environment it's not improving too markedly either." Bank of Nova Scotia and Bank of Montreal upped their dividends and beat profit estimates earlier in the week. At 10:57 a.m. (1457 GMT) the Toronto Stock Exchange's S&P/TSX composite index was down 107.52 points, or 0.9 percent, at 11,902.27. The index's consumer staples sector -- the only group to move higher -- was helped by a Supreme Court decision to allow a challenge to the province of Ontario's ban on private-label generic drugs to proceed, which boosted big pharmacy chain Shoppers Drug Mart Corp. Shoppers' shares were up 0.1 percent at C$42.19.