CANADA STOCKS-TSX tumbles as commodity prices skid

Fri Nov 12, 2010 10:53am EST
 
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   * 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: Quote) fell 1.3 percent to C$140.83, while
Suncor Energy (SU.TO: Quote) lost 1.16 percent to C$35.64. Teck
Resources (TCKb.TO: Quote) tumbled 1.79 percent to C$49.45 and
Goldcorp (G.TO: Quote) 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)