CANADA STOCKS-Greek default fears knock TSX to near 7-month low

Thu Jun 16, 2011 4:33pm EDT
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   * Ends down 118.90 points, or 0.9 pct, at 12,853.13
 * Weakest close since November 23
 * Nine of the 10 main groups lower
 * Greek debt crisis, mixed U.S. data drag on sentiment
 (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, June 16 (Reuters) - Toronto's main stock index
marked its lowest closing in nearly seven months on Thursday,
as Greek default fears escalated and falling metal prices
weighed heavily on influential mining issues.
 Anxiety that Greece's debt and political turmoil could
explode into another global financial crisis continued to
undermine equity and commodity markets, as investors flocked 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: Quote) retreated nearly 5 percent to
 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 the 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.
 Potash Corp (POT.TO: Quote) 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: Quote) was down 2.9 percent to C$45.42,
while Barrick Gold Corp (ABX.TO: Quote) 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]
 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 rate hikes in China was
also dragging on sentiment.
($1=$0.98 Canadian)
 (Additional reporting by Trish Nixon; editing by Rob Wilson)