CANADA STOCKS-Global growth jitters trigger TSX drop

Wed May 15, 2013 4:52pm EDT
 
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* TSX falls 103.40 points, or 0.82 percent, to 12,473.65
    * All of 10 main sectors decline
    * Gold shares down 4.6 percent as bullion slips
    * Goldcorp sheds about 5 percent to play market's top
negative influence

    By John Tilak
    TORONTO, May 15 (Reuters) - Canada's main stock index
slumped on Wednesday, with every major sector trading in the
red, after sluggish data from Europe and the United States
renewed fears about the global economic recovery.
    Investors were discouraged by data showing U.S. factory
output dropped in April and manufacturing activity in New York
state contracted this month. Further, wholesale prices recorded
their largest decline in three years. 
    Germany's economy crept back into growth at the start of the
year but not by enough to stop the euro zone from contracting
for a sixth straight quarter, and France slid into recession.
 
    The slew of data helped weaken prices of bullion and other
commodities, causing shares of gold producers to tumble.
    The resource-sensitive Toronto index, which reacts sharply
to the global growth story, hit a one-week low despite gains
made by U.S. stocks.
    "The TSX is a proxy for global growth," said Elvis Picardo,
strategist and vice president of research at Global Securities
in Vancouver. "Any hint of weakness in influential regions like
the U.S. and Europe tends to affect us quite
disproportionately."
    The sharp decline in the Canadian market was indicative of
the contrast this year in the fortunes of the Toronto index and
the S&P 500. While the TSX is barely up since the start
of the year, the S&P 500 has climbed about 16 percent.
    "There's a distinct lack of appetite for Canadian stocks,"
Picardo said. "It does seem the theme of the year is to avoid
Canadian stocks regardless of what news comes out and pile into
U.S. equities."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 103.40 points, or 0.82 percent, at
12,473.65. The market hit its lowest point since May 7.
    "The numbers are indicating a knee-jerk reaction through the
market, which is affecting people's perceived demand for
commodities and prospects for manufacturing," said Michael
Sprung, president of Sprung Investment Management.
    All of the 10 main sectors on the index were in the red. 
    The materials sector, which includes mining stocks, slipped
2.7 percent, hurt by a decline in gold shares. 
    The gold sector, down 37 percent since the start of the
year, fell 4.6 percent as a strong U.S. dollar pulled down
bullion prices to a near one-month low. 
    "With the economy faltering and the debt levels generally
rising, it's surprising to see the pressure continue on gold,"
Sprung said. He said the only explanation was that people are
looking for safety in the U.S. dollar and U.S. treasuries.
    Miner Goldcorp Inc lost 5.1 percent to C$27.74 and
played the biggest role of any single stock in leading the
market lower.
    First Majestic Silver Corp cut its 2013 capital
expenditure estimate and warned of further cuts later this year
as it looks to blunt the effects of falling prices of silver.
The stock fell 9 percent. 
    Energy shares fell 0.6 percent. 
    Financials, the index's most heavily weighted sector, gave
back 0.6 percent. Royal Bank of Canada fell about 1
percent.