June 16, 2011 / 9:34 PM / 6 years ago

CANADA STOCKS-Greece fears knock TSX to Nov low, RIM sinks

 * Ends down 118.90 points, or 0.9 pct, at 12,853.13
 * Weakest close since Nov. 23
 * Nine of the 10 main groups lower
 * Greek debt crisis, mixed U.S. data drag on sentiment
 * RIM plunges 15 pct after hours after results miss  (Adds details, quotes, RIM earnings)
 By Claire Sibonney
 TORONTO, June 16 (Reuters) - Toronto’s main stock index marked its lowest close since November on Thursday as Greek default fears escalated, while after the bell Research In Motion  RIM.TO plunged on disappointing earnings.
 RIM’s quarterly profit dropped and its revenue missed its already-lowered forecast, forcing the BlackBerry maker to slash its outlook and sending its shares down 15 percent to below $30 in after-hours trading. [ID:nN16217792]
 Meanwhile, fears that Greece’s debt and political turmoil could explode into another global financial crisis continued to undermine equity and commodity markets, spurring investors to flock to the safety of bonds and currencies such as the U.S. dollar.
 “There’s persistent anxiety about Greece and the potential for credit contagion and that’s overhanging the market,” said Fergal Smith, managing market strategist at Action Economics.
 The TSX’s materials group, home to miners, was the hardest hit. The group sank 2.8 percent, tracking lower with copper prices, which fell on a stronger U.S. dollar, fears of weak U.S. economic growth, and worries about the euro zone debt crisis. [MET/L]
 The base-metals subsector skidded 3.4 percent, as Teck Resources TCKb.TO dropped 3.6 percent to C$43.75 and First Quantum Minerals (FM.TO) retreated nearly 5 percent to C$115.37.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 118.90 points, or 0.92 percent, at 12,853.13. It was its weakest closing level since Nov. 23.
 Nine of the 10 main groups were down, including powerhouse energy shares, off 0.8 percent. Consumer discretionary stocks were up 0.1 percent.
 Smith said markets were watching a key level for the Standard & Poor’s 500 index at its March low of 1,249. A breach below that mark could spill over into the Canadian market. The S&P 500 .SPX closed 2.22 points, or 0.18 percent, higher at 1,267.64 on Thursday.
 On the TSX, Smith said he was eyeing support at 12,698, which marks a 50 percent retracement of the July to March rally.
 Potash Corp (POT.TO) was the most influential decliner, falling 3.4 percent to C$50.99 as the fertilizer producer was hit by sharply lower corn prices and concerns about waning demand. [ID:nN16531556]
 Gold miners were also sharply lower even as bullion prices steadied. Goldcorp Inc (G.TO) was down 2.9 percent to C$45.42, while Barrick Gold Corp (ABX.TO) lost 1.8 percent at C$42.27.
 International lenders dangled a lifeline to save Greece from defaulting next month as Prime Minister George Papandreou faced down rebels in his socialist party against EU/IMF-ordained austerity measures. [ID:nLDE75F0TU]
 “What has to happen for the Greek situation to work is the people of Greece have to accept tough times and they don’t seem to be willing to accept it,” said Douglas Davis, chief executive at Davis-Rea. “If they pitch out the current government, Greece is really in trouble.”
 Mixed U.S. economic data added to the gloomy mood. A gauge of regional manufacturing activity slumped to a near two-year low in June, suggesting U.S. factories were faltering and overshadowing better than expected readings on the labor and housing markets. [ID:nN16172420]
 Smith noted that speculation over interest rate hikes in China was also dragging on sentiment.
 A bright spot on the index was Air Canada ACa.TO, which surged almost 8 percent to C$2.17 after the country’s biggest airline reached a deal with striking workers. [ID:nN16130486]
($1=$0.98 Canadian)  (Editing by Peter Galloway)                                        

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