CANADA STOCKS-TSX extends fall, down 3 pct on Greece fears

Mon Oct 3, 2011 2:18pm EDT
 
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 * TSX down 321.81 points, 2.8 pct, at 11,302.03
 * All 10 sectors weaker
 (Updates with details, analyst comment)
 By Andrea Hopkins
 TORONTO, Oct 3 (Reuters) - Toronto's main stock market
index was down nearly 3 percent in afternoon trade on Monday as
growing fears of a Greek default stoked appetite for safe-haven
U.S. Treasury bonds and commodity prices extended their slide.
 Canadian shares followed global stocks lower as
stronger-than-expected U.S. economic data failed to offset
negative sentiment, especially in financial stocks, over the
increasing likelihood of a Greek default.
 All 10 of Toronto's sectors were weaker, led by energy and
financials, as oil prices dropped 1.5 percent and investors
fretted about global banking exposure to European debt.
 Canadian banks have said they have little or no exposure to
Greek debt.
 "It's really just more of the same. It's the commodity
area, that seems to be affected, and still the focus is on
Greece and the European sovereign debt situation that is
causing all the problems," said John Kinsey, portfolio manager
at Caldwell Securities Ltd.
 "It really not Greece per se, but the contagion effect that
everybody feels is going to happen and the world is going to go
into recession."
 At 2:07 p.m. (1807 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 321.81 points, or
2.8 percent, at 11,302.03.
 The heavyweight energy sector, which makes up close to 30
percent of the index, led the sell-off, sliding 4.9 percent.
Financials, another third of the index, dropped 2.9 percent,
while the gold-dominated materials sector fell 1.9 percent.
 Bank shares were battered in Europe as investors feared the
impact of a Greek default on holders of the country's bonds,
such as Franco-Belgian financial group Dexia (DEXI.BR: Quote), whose
stock slumped more than 10 percent.
 Greece admitted it would miss its deficit target of 7.6
percent this year, making a Greek debt default look more
likely. In a draft budget sent to parliament on Monday, the
government forecast a deficit of 8.5 percent of gross domestic
product for 2011. [MKTS/GLOB]
 Among Toronto's heaviest decliners, Suncor Energy (SU.TO: Quote)
slid 5.7 percent to C$25.25, Toronto-Dominion Bank (TD.TO: Quote)
dropped 3.5 percent to C$71.35, Royal Bank of Canada (RY.TO: Quote)
fell 3 percent to C$46.62, and Bank of Nova Scotia declined 3.4
percent to C$50.95.
 The few gainers were led by Euro Goldfields EGU.TO, which
climbed 19.5 percent after it said it has agreed terms for a
$600 million, seven-year loan from Qatar Holding. Birchcliff
Energy (BIR.TO: Quote) also surged, risng 15 percent after the company
said it was looking to sell itself after receiving unsolicited
buyout offers.
 U.S. data that showed September manufacturing was stronger
than expected did little to boost the commodity-heavy TSX,
which underperformed Wall Street. [ID:nN1E7920I2] [.N]
 Friday marked the end of the worst quarter for Canadian
equities since 2008. The TSX extended losses on Monday despite
positive flows usually seen on the first day of the new
quarter.
 "Most of the price action recently has been more on the
macro level than Canada-specific or single-name specific, and
today is another example. ... The inflows don't counterweight
the amount of pessimism in the market," said Francis Campeau,
broker at MF Global Canada in Montreal.
 ($1=$1.05 Canadian)
 (Additional reporting by Claire Sibonney; Editing by Frank
McGurty)