CANADA STOCKS-TSX dives as global economic worries mount

Tue Sep 6, 2011 11:16am EDT
 
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 * TSX down 193.73 points, or 1.5 percent at 12,408.68
 * Energy, banks lead decline
 * Gold mining stocks help offset losses
 By Trish Nixon
 TORONTO, Sept 6 (Reuters) - Toronto's main stock market
index joined U.S. stocks in falling sharply on Tuesday morning
as concern mounted that the United States could fall into
recession and that the euro zone's sovereign debt crisis was
worsening.
 European equities also dropped, extending the previous
session's 4 percent decline, with bank shares hitting a
29-month low on worries about the political handling of the
euro zone debt crisis. [.EU] [MKTS/GLOB]
 "The North American markets and the TSX are reacting to the
worries about European debt and the concerns over growth," said
Gavin Graham, president at Graham Investment Strategy. He added
that U.S. and Canadian markets were catching up with the action
elsewhere after being closed for the Labor Day holiday on
Monday.   
 Friday's U.S. jobs report, which showed zero net jobs
growth in August, also hurt investor confidence. [.N]
 Energy shares led the TSX's decline, falling 3.6 percent as
investors shed risky assets. Brent crude prices rose on
expectations of new stimulus measures for the U.S. economy, but
U.S. crude was lower. [O/R]
 Suncor Energy (SU.TO: Quote) was the index's top decliner, falling
3.7 percent to C$28.89, while Canadian Natural Resources
(CNQ.TO: Quote) dropped 4.1 percent to C$33.50.    
 Economically sensitive financial stocks were down 2
percent, with Toronto-Dominion Bank (TD.TO: Quote) off 2.1 percent at
C$75.57, and Bank of Nova Scotia (BNS.TO: Quote) down 2.4 percent at
C$51.84.
 At 10:17 a.m. (1417 GMT) the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 193.73 points, or
1.5 percent, at 12,408.68. Earlier in the session it fell as
low as 12,355.92, its weakest point since Aug. 29.
 Nine of the index's 10 main sectors were lower. The
materials group bucked the trend as gold-mining stocks jumped
3.1 percent, pushing the sector into positive territory.
 Gold prices fell from record highs after Switzerland's
central bank shocked markets by setting a floor for the
euro/Swiss exchange rate in an effort to curb franc strength,
but the metal was set for fresh gains as the franc's safe-haven
status waned. [FRX/]  [GOL/]
"People are being driven out of one safe haven, with the
franc off a lot on the back of those comments from the Swiss
National Bank, so where are you going to go? And the answer
seems to be into gold," Graham said.
Gold miners were the index's most heavily weighted
advancers. Barrick Gold (ABX.TO: Quote), up 4.3 percent at C$54.22,
and Goldcorp (G.TO: Quote), up 2.9 percent at C$55.29, topped the
list.
($1=$0.99 Canadian)
 (With additional reporting by John McCrank; editing by Peter
Galloway)