CANADA STOCKS-TSX sinks 2 pct, hit by earnings, commodities

Tue Oct 23, 2012 11:39am EDT
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* TSX drops as much as 2.12 percent to 12,141.19
    * Energy down 2.5 pct, materials off 2.33 pct
    * RBC, Suncor, CNQ most influential decliners

    By Solarina Ho
    TORONTO, Oct 23 (Reuters) - Canada's main stock index dived
as much as 2 percent on Tuesday, with energy and mining shares
leading the retreat after a downgrade of five Spanish regions
and lackluster U.S. corporate earnings rekindled worries about
the global economy.
    "It's everything. Everything is down. The mood in the United
States has been pretty black. Everything is red across the
board," said John Ing, president of Maison Placements Canada. 
    Energy stocks, already hit hard in the previous session,
fell another 2.5 percent. Suncor Energy, one of the most
heavily weighted decliners, dropped 2.64 percent to C$32.50.
Fellow oil producer Canadian Natural Resources was
another key decliner, tumbling 4.06 percent to C$29.53.
    Oil and gas companies had fallen on Monday after Canada's
shock weekend decision to block Malaysian state oil firm
Petronas's C$5.17 billion bid for Progress Energy Resources Corp
, raising concerns the government might also veto
state-owned Chinese company CNOOC's C$15.1 billion takeover bid
for oil producer Nexen Inc.  
    On Tuesday, lower oil prices were also pushing energy shares
down as investors focused on the fragile world economy and its
impact on demand for oil, copper and other commodities. The
Toronto index's resource sectors tracked bullion and copper
prices, which both hit six-week lows.   
    The index's materials group, home to miners, slid 2.33
percent. Goldcorp Inc was down 2.7 percent at C$42.20.
    At mid morning, the Toronto Stock Exchange's S&P/TSX
composite index was down 1.82 percent, or 225.24
points, at 12,178.30. It fell as much as 2.12 percent to
12,141.19 earlier in the day .
    All 10 of the TSX index's 10 main groups were negative, with
nine down 1 percent or more. Only seven stocks on the index eked
out gains.
    Soft earnings from major U.S. companies like DuPont,
3M, United Technologies also fueled worries over
the economy of Canada's largest trading partner.
    Meanwhile, a Moody's credit rating downgrade of several
regions in Spain added to concerns over the euro zone, which
were already heightened as Spanish Prime Minister Mariano
Rajoy's government remained undecided on whether to seek a
    The financial sector, the index's biggest group, was down
1.7 percent, led by Royal Bank of Canada, the decliner
with the biggest impact on the index. RBC, which said on Tuesday
it agreed to buy the Canadian auto finance and deposit business
of Ally Financial for $4.1 billion, dropped 2.05 percent to
    Toronto-Dominion Bank, which struck a deal to buy
Target Corp's credit card portfolio, was 1.58 percent
lower, at C$81.61.
    The financial, energy and materials groups combined make up
roughly 75 percent of the index's weight.
    Canadian National Railway was down 1.31 percent, at
C$85.93. The rail operator posted a modest increase in quarterly
profit on Monday as revenues climbed for all its business
segments, and affirmed its full-year forecast despite its
caution over the economy.