September 28, 2011 / 9:23 PM / 6 years ago

CANADA STOCKS-TSX drops nearly 2 pct on euro-zone fears

   * TSX falls 235.22 points, or 1.99 pct, to 11,585.87
 * Eight of 10 sectors lower; energy, materials weigh
 By Julie Gordon and John McCrank
 TORONTO, Sept 28 (Reuters) - Toronto’s main stock index dived nearly 2 percent on Wednesday as concerns over Europe’s mounting debt crisis cast a shadow on global economic growth prospects, sending commodities lower.
 The TSX index’s mining-heavy materials sector skidded 3.9 percent and its energy sector fell 3.24 percent as doubts about whether European officials would or could take action to rescue the Greek economy caused investors to shun commodities.
 “If there is to be a disorderly default, then you’re likely to have lower economic growth, and that’s obviously the driver,” said Gavin Graham, president of Graham Investment Strategy.
 “Canada gets hit hardest when you’re having a ‘risk off’ trade and things like Teck TCKb.TO and Cameco (CCO.TO) and the energy stocks are getting thumped pretty badly.”
 Diversified miner Teck Resources was down 5.18 percent at C$30.40, and uranium producer Cameco Corp dropped 4.7 percent at C$19.50. Oil producer Suncor was the biggest heavyweight decliner, down 4.69 percent at C$27.05, and Canadian Natural Resources (CNQ.TO) shed 3.08 percent to C$30.79.
 “There hasn’t been any concrete news or any tangible solution out of Europe, so I think that manifests itself in a big retreat in commodity prices,” said Elvis Picardo, vice president of research at Global Securities.
 U.S. crude, a day after posting gains for the first time in five sessions, tumbled 3.64 percent to under $80 a barrel, while copper collapsed 7 percent to its lowest close in 14 months, and gold fell 3 percent as investors moved to the U.S. dollar as a safe haven. [O/R] [MET/L] [GOL/]
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 1.99 percent, or 235.22 points, at 11,585.87. Eight of the index’s 10 main groups declined.
 The TSX rallied more than 3 percent in the previous two sessions on hopes that euro zone leaders were readying decisive action to tackle the region’s debt woes.
 Looking ahead, markets will be focused on a German parliamentary vote Thursday on whether to back new powers for the euro zone rescue fund. [ID:nS1E78R1OY]
 Financials slipped 0.8 percent, with Canada’s largest bank, Royal Bank of Canada (RY.TO), falling 1.14 percent to C$47.53, and Bank of Nova Scotia (BNS.TO) down 1.02 percent at C$52.43.
 Shares of Yellow Media Inc YLO.TO plunged 50.88 percent to 28 Canadian cents after the debt-laden telephone directory publisher said it would take a C$2.9 billion ($2.8 billion) charge in the third quarter. [ID:nL3E7KS23A]
 In the latest economic data, new orders for long-lasting U.S. manufactured goods slipped in August on weak demand for motor vehicles, but a rebound in a gauge of business spending suggested the U.S. economy would avoid another recession. [ID:nS1E78R088]
 On the positive side, the TSX’s consumer staples sector rose 0.09 percent, with Shoppers Drug Mart SC.TO climbing 1.9 percent to C$41.61, and grocers Metro Inc MRUa.TO and Empire Co (EMPa.TO) up 0.8 percent at C$45.38 and up 1.05 percent at C$57.75 respectively.
 ($1=$1.03 Canadian)  (With additional reporting by Trish Nixon; editing by Peter Galloway)                   

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below