3 Min Read
*TSX falls 60.74 points to 12,607.27
*Six of index's 10 sectors weaker
*Financial group up 0.4 percent (Updates with details, commentary)
By Claire Sibonney
TORONTO, Oct 19 (Reuters) - Toronto's main stock index fell on Tuesday morning as commodity prices weakened on the back of a stronger greenback after China unexpectedly hiked interest rates.
Gold, base-metals and oil prices all tumbled, and the safe-haven U.S. dollar rose, following the announcement, which caught investors off guard. [O/R] [GOL/] [MET/L]
Among the biggest decliners on the Toronto market were gold-mining shares, down 2.6 percent; base-metal miners, off 2.3 percent; and energy producers, which fell 0.7 percent.
"What really hit the market was China's move," said Fergal Smith, managing market strategist at Action Economics.
"The market has been driven higher by looser monetary policy globally, but now China has surprised the market by tightening policy, that's seen as a rethink on stocks and on gold prices, which have been driven higher by monetary stimulus."
The Chinese rate hike was the first in nearly three years, a step that reflects central bank concern about rising domestic asset prices and stubborn inflation. [ID:nTOE63E07V]
However, Bank of America Corp (BAC.N) beat Wall Street expectations, which helped to boost confidence in heavily weighted Canadian financial stocks, up 0.4 percent, and tempered the index's losses overall. [ID:nN19106691]
At 10:21 a.m. (1421 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 60.74 points, or 0.48 percent, at 12,607.27. Six of its 10 sectors were lower.
Potash Corp (POT.TO) rose 1.7 percent to C$147.84 after the chief executive of Yara International (YAR.OL) said that the Norwegian fertilizer firm was open to buying assets from Potash, the world's largest fertilizer producer. [ID:nLDE69H07O]
$1=$1.03 Canadian Editing by Peter Galloway