November 17, 2011 / 6:39 PM / in 6 years

CANADA STOCKS-Slumping energy, gold issues lead TSX lower

   * TSX down 205.79 pts, or 1.7 pct, at 11,968.57
 * Index hits lowest point since Nov. 1
 * Gold miners fall as bullion hits one-week low
 * Upbeat U.S. data limits losses  (Adds details, updates prices)
 TORONTO, Nov 17 (Reuters) - Toronto’s main stock index tumbled more than 200 points on Thursday, with mining and energy stocks tracking gold and oil prices lower, as rising yields on European bond sales sparked fears of a worsening euro zone debt crisis.
 The heavily weighted materials sector led the slide, falling more than 3 percent, mostly due to gold-mining stocks, which also fell more than 3 percent as bullion prices hit a one-week low. [GOL/]
 Barrick Gold (ABX.TO) was down 2.7 percent at C$51.20, while Goldcorp (G.TO) skidded nearly 2.2 percent to C$52.34.
 Energy issues were down 1.6 percent after gaining 1 percent in the previous session. Canadian Natural Resources (CNQ.TO) led that sector’s decline, falling 2 percent to C$37.88.
 The drop by energy stocks came as U.S. crude fell by more than $3 a barrel, a day after it topped $100, as worries about the euro zone crisis deepened. [O/R]
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 205.79 points, or 1.7 percent, at 11,968.57 by early afternoon, its lowest point since Nov. 1.
 The retreat mirrored the broader downturn on global markets as 10-year Spanish bond yields approached the precarious 7 percent mark, their highest level since 1997, unnerving investors. A French bond auction also saw high yields. [MKTS/GLOB]
 Solid U.S. economic data helped limit the losses. New U.S. claims for jobless benefits hit a seven-month low last week, while permits for home construction rebounded strongly in October, bolstering views the economy was gaining traction. [ID:nN1E7AG0BT]
 “If we didn’t have that outstanding problem in Europe we’d actually see the (index rising),” said Robert Kavcic, economist at BMO Capital Markets.
 Better mid-morning news out of Italy and Greece also helped calm market sentiment. Italian Prime Minister Mario Monti pledged additional economic reforms and Greece was to present creditors with a proposal to halve its privately held debt by the end of the month, a senior finance ministry official told Reuters. [ID:nL5E7MH0ZT] [ID:nL5E7MH2OS]
 As Europe’s economy suffers beneath its debt burdens, investors feared it could start to seriously affect the profits of North American banks.
 A Fitch Ratings report on Wednesday said U.S. banks could be greatly affected if “contagion continues to spread beyond the stressed European markets.”
 Canadian banks, which have limited exposure to euro zone debt, were down again on Thursday, as the financials sector fell 1.4 percent.
 Royal Bank of Canada (RY.TO) was down 2.3 percent at C$44.08 and Bank of Nova Scotia (BNS.TO) slid 1.7 percent to C$49.86.
 Healthcare was the only TSX sector not in the red, rising 1 percent, boosted by SXC Health Solutions Corp’s SXC.TO announcement it will buy privately held smaller rival HealthTrans LLC for $250 million. SXC’s shares rose more than 7 percent to C$54.27. [ID:nL3E7MH1W3]
 In other company news, Magna International Inc (MG.TO) shares rose 1 percent to C$35.47 after it said it will acquire German parts maker BDW Technologies’ aluminum die casting operations in Europe. [ID:N1E7AG0KF]
 ($1=$1.02 Canadian)  (Editing by Rob Wilson)                 

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