CANADA STOCKS-TSX hits 3-week low as euro zone fears intensify
*TSX down 238.71 points, or 1.93 percent, at 12,148.83
*9 of 10 index sectors weaker, techs gain on RIM (Updates with details, comments)
By Trish Nixon
TORONTO, Sept 12 (Reuters) - Toronto's main stock market index fell sharply on Monday, almost touching a three-week low on mounting fears that the euro zone's debt crisis could undermine global economic recovery.
The S&P/TSX composite tumbled even as U.S. stock markets staged a late-day rally as investors cashed out of safe-haven bullion to cover losses elsewhere, hitting Toronto's gold-mining shares. Oil and copper prices also fell, pressuring the resource-heavy index. [GOL/] [MET/L] [O/R]
"The gold sector used to play a counterweight to the financial firms, and today (both sectors) are going south ... so for the first time in roughly a month we've underperformed in a down market," said Francis Campeau, broker at MF Global Canada in Montreal.
All three of the index's most heavily weighted sectors dived, with materials, down 3.2 percent, leading the fall. Energy stocks fell 2.1 percent, while financials were down 1.8 percent.
Among the most heavily weighted decliners, Goldcorp G.TO lost 4.3 percent to C$52.55, Royal Bank of Canada RY.TO dropped 2.7 percent to C$46.20, and Suncor Energy SU.TO fell 3.2 percent to C$28.51.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 238.71 points, or 1.93 percent, at 12,148.83. Earlier in the session it fell to 12,041.61, its weakest level since Aug. 26.
Concerns that Moody's Investors Service might downgrade the credit-worthiness of French banks, which are widely exposed to Greek bonds, and the lack of a solution to Greece's months-old debt crisis rattled investor confidence. [MKTS/GLOB]
"You might be looking at not only a potential sovereign credit crisis, there could be another banking crisis in Europe," said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver. He noted that credit default swaps were indicating a 98 percent chance of a Greek debt default in the near term.
"Canada, being very commodity driven, very economically sensitive, could be impacted quite a bit," Xu said.
Risk aversion was exacerbated by the failure of the weekend meeting of finance ministers from the Group of Seven industrialized nations to come up with any fresh proposals for boosting global growth. [nN1E78728T]
"There's just not a lot of good news around right now ... The volatility is going to be here and you just have to hold your breath and see what comes up next," Xu said.
Nine of the index's 10 main groups were lower, but the technology sector was pushed into positive territory by Research In Motion RIM.TO, which rose 1.6 percent to C$29.98.
Dolby Laboratories DLB.N said on Monday it has withdrawn its patent infringement lawsuit against RIM after the BlackBerry maker inked a licensing deal to use some of Dolby's technologies. [S1E78B0R0]
($1=$0.99 Canadian) (Reporting by Trish Nixon; editing by Peter Galloway)
© Thomson Reuters 2016 All rights reserved.