May 14, 2010 / 2:42 PM / 7 years ago

CANADA STOCKS-TSX down more than 1 pct on euro zone debt fears

 * TSX down 133.96 points, or 1.1 percent, at 11,982.63
 * Nine of TSX index groups lower
 * Golds fight to limit index’s fall
 (Adds details, quote)
 By Jennifer Kwan
 TORONTO, May 14 (Reuters) - Toronto’s main stock index followed global markets lower on Friday on speculation that heavy euro zone debt loads could dampen a fragile global economic recovery.
 Oil prices fell toward $73 a barrel as investors feared euro zone debt concerns could hamper future energy demand growth, pushing down energy shares by 1.7 percent. [O/R]
 Suncor Energy (SU.TO) fell 1.8 percent to C$32.25, while EnCana Corp (ECA.TO) dropped 1.8 percent to C$32.78.
 European authorities announced a massive debt safety net for Greece, Spain and Portugal this week, but investors remained skeptical whether those countries can take the pain of overhauling their poor public finances. [MKTS/GLOB]
 “Nobody believes that the bailout in the euro zone is going to work out. Everybody is still negative on the euro,” said Joe Ismail, technical analyst at Maison Placements Canada.
 At 10:08 a.m. (1408 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was 133.96 points, or 1.1 percent, lower at 11,982.63. Nine of its 10 main sectors were lower.
 Toronto’s financials sector, down 1.5 percent, also got caught up in the mood, with Royal Bank of Canada (RY.TO) down 1.6 percent at C$59.68.
 Separately, ratings agency Moody’s cut the long-term debt rating on the bank’s U.S. unit. [ID:nN14155340]
 As well, the sector was weighed down a day after the U.S. Senate voted to limit fees charged on credit and debit card transactions. [ID:nN14139295]
 Fighting to limit the resource-laden index’s drop were gold mining shares, with the subsector up 1.3 percent.
 Gold hit record highs near $1,250 an ounce in Europe on Friday as investors flocked to safety on fears about sovereign risk in the euro zone and instability in the foreign exchange markets. [GOL/]
 Barrick Gold (ABX.TO), the world’s No. 1 gold producer, rose 1.7 percent to C$46.55 and Goldcorp (G.TO) climbed 0.7 percent to C$46.80. Agnico-Eagle Mines (AEM.TO) was up 2 percent at C$65.59.
 Ismail said he’s watching to see if the main index drops below its 200-day moving average around 11,500, a key technical support level.
 “As long as we can hold above that we’re on safe ground. If we begin to break right through and we remain there then we are starting a different pattern of trends,” he said.
 In earnings, toymaker Mega Brands Inc MB.TO returned to a first-quarter profit on Friday as the Canadian toymaker benefited from a gain related to its recent recapitalization plan. Its shares were up 5.9 percent at 54 Canadian cents.
 ($1=$1.03 Canadian)  (Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)                                       

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