CANADA STOCKS-TSX stumbles as China tightens lending

Fri Feb 12, 2010 10:19am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

 * TSX falls 73.61 points, or 0.64 pct, to 11,361.88
 * China move to tighten bank reserve levels hits markets
 * Commodity-linked shares lead selloff
 (Adds details, quote)
 By Jennifer Kwan
 TORONTO, Feb 12 (Reuters) - Toronto's main stock market
index sank on Friday as China's surprise move to increase bank
reserve requirements raised worries about the impact of Chinese
monetary tightening on global growth.
  The Chinese announcement rattled oil, gold and base metals
markets, sending prices lower. [O/R] [GOL/] [MET/L]
 Suncor Energy (SU.TO: Quote) topped the list of Toronto's downside
movers, dropping 1.5 percent to C$30.75, while Barrick Gold
(ABX.TO: Quote) fell 1.7 percent to C$38.27.
 China sprung its surprise on global markets on the eve of
its New Year's holiday, increasing bank reserve requirements
for the second time this year in a move that shows it is intent
on curbing bank lending and inflation. [ID:nTOE61B069]
 "There's the concern that rate hikes in China will slow
economic growth there and therefore demand for commodities will
be affected," said Paul Taylor, chief investment officer at BMO
Harris Investment Management Inc.
 "From a Canadian market perspective that certainly is the
reaction. From the broader perspective ... that means concern
about slower growth for the global economy."
 At 10:01 a.m. (1501 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 73.61 points, or
0.64 percent, at 11,361.88.
 Another big name dragging down the market was Canadian life
insurer Manulife Financial (MFC.TO: Quote), down 1.7 percent at
C$18.84. Manulife and Sun Life (SLF.TO: Quote), which fell 1.4 percent
at C$29.97, reported disappointing results on Thursday.
 The index's move lower was in stark contrast to Thursday's
rally in which it touched its highest level in a week as a
European Union rescue plan for debt-laden Greece helped lift
market confidence and commodity prices.
 On the upside, Research In Motion RIM.TO climbed 1.8
percent to C$74.20, after RBC raised its rating on the
company's stock to "top pick" from "outperform".
 ($1=$1.06 Canadian)
 (Reporting by Jennifer Kwan; editing by Peter Galloway)