CANADA STOCKS-TSX hits near 2-month low on Europe debt fears

Fri Nov 25, 2011 5:18pm EST
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 * TSX down 23.26 pts, or 0.2 pct, at 11,462.06
 * TSX down more than 6 pct in November
 * Materials, energy groups lead index's losses
 * Hungarian, Belgian debt downgrades weigh on sentiment
 * Italian, German bond sales stoke fears
 (Adds analyst's comments, details) 
 By Jon Cook
 TORONTO, Nov 25 (Reuters) - Toronto's main stock index hit
a near two-month low on Friday as resource-related issues fell
after euro-zone debt downgrades and as another poor showing for
Italian and German bond sales sparked fears about the European
 A slew of bad news from Europe and light trading due to the
U.S. Thanksgiving holiday proved a bad combination for the
commodities-heavy index, which suffered its worst weekly fall
since early October, dropping more than 4 percent.
 "In essence, Canada is a warrant on growth because of its
50 percent (weighting) in energy and materials in the index,"
said Gavin Graham, president at Graham Investment Strategy. "If
you are worried about the outlook for growth, then that's going
to reduce demand for commodities."
 Oil and gas stocks led the index's losses, falling 0.7
percent as investor concerns that oil demand will be hurt by
Europe's spreading debt crisis pushed crude prices to their
second straight weekly loss. [O/R]
 Canadian Natural Resources CNQ.TO led the sector's fall,
dropping 2.3 percent to C$33.96. Suncor Energy (SU.TO: Quote) fell 2.1
percent to C$28.14.
 Gold and copper prices also fell, pulling down the index's
heavily weighted materials sector 0.1 percent. [GOL/] [MET/L]
Diversified miner Teck Resources Ltd TCKb.TO was a leading
decliner, down 2 percent at C$32.66.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 23.26 points, or 0.2 percent, at
11,462.06. It was the index's lowest close since Oct. 5.
 The TSX is down more than 6 percent since the beginning of
November, undermined by a parade of punishing news from
 In another worrying bond sale on Friday, Italy was forced
to pay a record 6.5 percent for six months paper. That followed
a disastrous German bond auction earlier in the week and the
failure of the leaders of France, Germany and Italy to make
headway in tackling the debt crisis. [ID:nL5E7MP2B8]
 Also hurting investor sentiment were credit downgrades in
Belgium and Hungary. [ID:nN1E7AO0Y7] [ID:nL5E7MP0I9]
 "Things just keep getting worse in Europe," Graham said.
 The index's financial sector was down 0.3 percent. Royal
Bank of Canada (RY.TO: Quote) dropped 1.1 percent to C$43.40, while
Toronto Dominion Bank (TD.TO: Quote) fell 0.8 percent to C$68.18.
 ($1=$1.05 Canadian)
 (Editing by Peter Galloway)