CANADA STOCKS-TSX hits year low in global equities flight

Thu Sep 22, 2011 11:06am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * TSX sags 394.42 points, or 3.30 pct, to 11,560.50.
 * Index touches lowest level since August 2010
 * All 10 main sectors lower; energy, materials weigh
 (Updates prices, adds details)
  By Trish Nixon
  TORONTO, Sept 22 (Reuters) - Toronto's main stock index
fell more than 3 percent on Thursday morning, hitting its
lowest point in more than a year, as worried investors fled
equity markets after the U.S. Federal Reserve shook global
confidence with a bleak economic outlook.
 Wall Street fell more than 3 percent and European stocks
were down more than 4 percent to a two-year low as risk
aversion gripped global markets.
 "It doesn't matter what sector you look at, you're looking
at substantial drops in value here today. And I guess, given
the world situation, we probably knew something like this was
coming," said Fred Ketchen, director of equity trading at
ScotiaMcLeod.
 "There's fear, there's worry, there's talk about lack of
growth. It'll get overdone. We always do it. We overdo it on
the upside and overdo it on the downside," he said.
 At 10:35 a.m. (1435 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 394.42 points, or
3.30 percent, at 11,560.50. Earlier, it sank as low as
11,476.51, its weakest point since August 2010. All 10 main
index sectors were lower.
  A grim outlook for the U.S. economy from the Federal
Reserve on Wednesday and signs of a slowdown in China and
Germany sent world equity markets tumbling and drove investors
into safer currencies and government bonds.
 The U.S. dollar rose to a seven-month high against major
currencies as risk aversion swept through markets. [MKTS/GLOB]
 The TSX's materials and energy groups each dropped nearly 5
percent, as the gloomy outlook and the strong U.S. dollar
pummeled commodity prices. The Reuters-Jefferies CRB index of
commodities [.CRB] was set for its biggest one-day slide since
the "flash crash" in raw materials prices in early May this
year.
 Suncor Energy (SU.TO: Quote) was the heaviest drag on the index,
down 6 percent at C$26.43, while Barrick Gold (ABX.TO: Quote) fell
C$5.1 percent to C$50.81, and Potash Corp (POT.TO: Quote) lost 3.7
percent to C$48.53.
 The financials group fell 2.6 percent, led by
Toronto-Dominion Bank (TD.TO: Quote), down 3 percent at C$69.99. Royal
Bank of Canada (RY.TO: Quote) was off 2.6 percent at C$45.36 and
Manulife Financial (MFC.TO: Quote) tumbled 5.5 percent to C$11.26.
 The Fed set the ball rolling on Wednesday when it launched
"Operation Twist", a plan to lower long-term borrowing costs by
selling or not renewing short-term debt in favor of longer
bonds.
 The move was expected, but the Fed's statement of the
rationale behind it was stark, saying there were "significant
downside risks" facing the U.S. economy.
 ($1=$1.03 Canadian)
 (Reporting by Andrea Hopkins; editing by Peter Galloway and
Rob Wilson)