November 12, 2010 / 3:54 PM / in 7 years

CANADA STOCKS-TSX tumbles as commodity prices skid

   * TSX falls 1.03 percent to 12,801.54
 * Nine of 10 sectors under pressure, led by resources  (Adds details, quotes, background)
 TORONTO, Nov 12 (Reuters) - Toronto’s main stock index fell hard on Friday morning as commodity prices slid on fears of another Chinese rate hike and the ability of some euro zone countries to service their debts.
 Sovereign debt in the euro zone was a chief worry even though EU leaders reassured investors they would not be forced to write down the value of their bond holdings in the event of a new bailout.
 Prospects of further interest rate increases in China added another layer of pressure to Toronto’s resource-laden market, which saw its weighty materials sector shedding 1.3 percent and oil and gas down 1.15 percent.
 Crude oil fell to around $86 a barrel on Friday, slipping from a 25-month high reached in the previous session, while gold was down but off lows as the U.S. dollar surrendered early gains versus the euro. [O/R][GOL/]
 Potash Corp (POT.TO) fell 1.3 percent to C$140.83, while Suncor Energy (SU.TO) lost 1.16 percent to C$35.64. Teck Resources TCKb.TO tumbled 1.79 percent to C$49.45 and Goldcorp (G.TO) declined 1.2 percent to C$46.86.
 “The bad news is starting to bubble through again,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services, adding he was surprised the decline was not even steeper as overseas markets were under heavy pressure.
 Asian stocks slumped overnight, led by a 5 percent drop in the Shanghai composite index, its biggest single-day decline since May, while European shares were also weak.
 At 10:45 a.m. (1545 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was near a session low at 12,801.54, down 1.03 percent, or 133.20 points. Nine of its 10 main sectors were lower, with the exception of information technology.
 “We’re due for a downdraft here but that’s not to say that things are lousy,” Schwartz said. “I still believe corporate profits are going to continue to be strong and the U.S. economic data is improving much better than once thought.”
 U.S. consumer sentiment rose more than expected in early November, helped by a slightly better economic outlook and early holiday sales, a survey released on Friday showed.  [ID:nN12118352] [ID:nNLLCME6MT]
 ($1=$1.01 Canadian)  (Reporting by Ka Yan Ng; editing by Rob Wilson)                                        

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