CANADA STOCKS-TSX dragged lower by euro zone debt fears

Fri May 14, 2010 5:04pm EDT
 
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* TSX falls 101.62 points, or 0.84 percent, to 12,014.97

* Gold shares rise, cushioning index's fall

* TSX composite up 2.8 percent for the week (Adds details, quote)

By Jennifer Kwan

TORONTO, May 14 (Reuters) - Toronto's main stock index capped a roller-coaster week with a sharp drop on Friday as investors worried that heavy euro zone debt loads could derail global economic recovery.

The worries pulled oil prices below $72 a barrel, spurring a 1.7 percent fall in the TSX's energy sector. [O/R] Suncor Energy (SU.TO: Quote) fell 2.4 percent to C$32.06, while EnCana Corp (ECA.TO: Quote) dropped 0.8 percent to C$33.09. Canadian Natural Resources (CNQ.TO: Quote) declined 0.2 percent to C$72.60.

European authorities announced creation of a massive debt safety net for Greece, Spain and Portugal this week, but markets remained skeptical that austerity plans in those countries will succeed. The doubt helped to knock the euro down to an 18-month low versus the U.S. dollar. [MKTS/GLOB] [FRX/]

"There's a lot of concern about the contagion effect from Europe's debt problems," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"The thinking is that global growth is bound to suffer in this scenario, and that's what is also knocking down oil prices."   Continued...