(Corrects headline to “China rate hike” from “China rate cut”)
* TSX falls 0.77 percent to 12,570.55
* Resources tumble on surprise Chinese rate hike (Adds details)
TORONTO, Oct 19 (Reuters) - Toronto’s main stock index fell sharply to a one-week low on Tuesday as resource shares bore the brunt of a selloff sparked by China’s unexpected decision to raise interest rates.
The index’s heavily weighted energy and materials groups were the chief decliners, down 1.4 percent and 2.8 percent, respectively.
Gold, base-metals and oil prices all tumbled, and the safe-haven U.S. dollar rose, as the first Chinese rate hike in nearly three years caught investors off guard and raised concern that the world’s fastest growing economy was starting to cool. [ID:nSGE69I0HU]
The price of oil swooned more than 4 percent to below $80 a barrel, suffering its biggest one-day percentage loss since February, while gold was knocked down as much as 2.7 percent. [O/R] [GOL/]
“We had an increase in interest rates in China for the first time in a while. That’s putting a bit of concern that the brakes are going to be put on there, in terms of their growth,” said John Kurgan, senior market strategist at Lind-Waldock.
“The commodity sectors for the most part took a hit here.”
Key decliners were largely gold-mining stocks and big energy names. Barrick Gold (ABX.TO) fell 3.3 percent to C$46.91, while Goldcorp (G.TO) sagged 2.6 percent to C$43.45. Canadian Natural Resources (CNQ.TO) lost 1.4 percent to C$37.28, while Suncor Energy (SU.TO) slid 0.92 percent at C$34.32.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed 97.46 points, or 0.77 percent, lower at 12,570.55. It was down more than 1 percent earlier in the day on weakness in three of its heavyweight sectors -- materials, energy and financials.
Financial shares clawed back into positive territory, after tracking tumbling U.S. bank shares, which felt renewed pressure over mortgage foreclosures. [ID:nN19106691]
Overall, half of the index’s 10 main groups were lower.
$1=$1.03 Canadian Editing by Peter Galloway