CANADA STOCKS-TSX falls on fears of global slowdown

Fri Sep 30, 2011 11:09am EDT
 
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 *TSX falls 85.86 points, or 0.73 percent, to 11,600.46
 *Eight of 10 index sectors weaker; energy weighs
 *Gold miners support index
 TORONTO, Sept 30 (Reuters) - Toronto's main stock market
index fell on Friday morning, on course for its fifth straight
monthly decline and second straight quarterly drop, as global
growth fears intensified following a raft of disappointing
economic data.
 Activity in China's factory sector fell for a third
consecutive month in September, suggesting that the world's
second-largest economy is not immune to global headwinds.
[ID:nL3E7KU097] The figures added to fears about slowing global
demand and pressured commodity prices, which weighed on the
resource-heavy TSX index.
 "China's not going to grow at 10 percent forever," said
Levente Mady, market strategist at Union Securities in
Vancouver. "All you have to do is look at the chart on the
Chinese market and you'll see that that adjustment has been
happening on an ongoing basis for a number of months now."
  Brent crude futures extended losses to more than $2 a
barrel, and copper, which looked on track for its worst monthly
loss in three years, fell further. [O/R] [MET/L]
 Canadian Natural Resources (CNQ.TO: Quote) was the heaviest
decliner on the TSX, falling 2.7 percent to C$39.69. Suncor
Energy (SU.TO: Quote) lost 2.2 percent to C$27.11, and Teck Resources
(TCKb.TO: Quote) lost 2.2 percent to C$30.05.
 At 10:16 a.m. (1416 GMT) the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 85.86 points, or
0.73 percent, at 11,600.46, with eight of the 10 main sectors
lower. Earlier the index fell more than 1 percent to a low of
11,535.22.
 Weak U.S. data further dampened sentiment. U.S. incomes
fell for the first time in nearly two years in August and
restrained consumer spending, the figures showed.
[ID:nS1E78T0A4]
 Meanwhile, lack of a visible solution to the euro zone's
deepening debt woes continued to weigh as the boost generated
by Germany's parliamentary approval on Thursday for new powers
to the European Financial Stability Facility (EFSF) proved
fleeting.
 "We're going to continue to struggle," Mady said. "The
problems that we're having worldwide, now with China slowing,
and Europe continues to be a basket case... we're going to have
ongoing problems and I think it's going to be advisable to be
defensive."   
 The TSX index's financial sector sank 1 percent, giving up
most of the previous session's gains. Royal Bank of Canada
(RY.TO: Quote) fell 0.8 percent to C$48.03, while Toronto-Dominion
Bank (TD.TO: Quote) lost 0.8 percent to C$74.39.
 Gold miners helped to curb losses, however, lifting the
index's materials sector into positive territory as the price
bullion rose. The metal was still on track for its biggest
quarterly gain this year even though it looked set to end
September with a loss of more than 10 percent, its worst
monthly performance since October 2008. [GOL/]
 Goldcorp (G.TO: Quote) was the index's top gainer, rising 3
percent to $47.66., followed by Barrick Gold (ABX.TO: Quote), up 2
percent at $48.95.
 ($1=$1.04 Canadian)
 (Reporting by Trish Nixon; editing by Peter Galloway)