CANADA STOCKS-TSX tumbles to near four-month low on U.S. data, Ebola fears

Wed Oct 1, 2014 5:13pm EDT
 
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* TSX down 155.07 points, or 1.04 percent, at 14,805.44
    * All of the 10 main index sectors decline
    * Market down in eight of last nine sessions

    By John Tilak
    TORONTO, Oct 1 (Reuters) - Canada's main stock index dropped
on Wednesday to a near four-month low as worries about a
slowdown in U.S. factory activity and news of the first
confirmed case of Ebola in the United States fueled a broad
selloff.
    The benchmark index has dropped in eight of its past nine
sessions.
    Growth in U.S. factory activity slowed more than expected in
September to its lowest level since June, according to data
released on Wednesday. 
    Adding more pressure, a business survey from the euro zone
showed manufacturing growth in the region slowed in September as
new orders contracted for the first time in more than a year.
 
    The Toronto stock market's benchmark index fell 4.3 percent
in September, its biggest monthly drop since May 2012. As well
as a U.S. dollar rally and softening commodity prices,
geopolitical tensions and worries that the U.S. Federal Reserve
will raise interest rates sooner than expected have been nagging
the market.
    "This overhang that the rates are going to rise at some
point has had a bit of a dampening effect," said Brad Radin,
chief investment officer of Radin Capital Partners. "Equity
markets go up over time, but they also have breathers, and we're
right in the middle of one of those."
    "The far bigger risk for most long-term investors is that
they wake up five years from now and realize that they had too
many bonds in a rising interest rate environment," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 155.07 points, or 1.04 percent, at
14,805.44. It is down about 5.6 percent since hitting a record
high last month.
    Canadian investors should reduce their exposure to domestic
stocks and look for value in international markets, said Radin,
who manages the IA Clarington Global Growth and Income Fund,
which was launched earlier this week.
    All of the 10 main sectors on the index were in the red on
Wednesday.
    Financials, the index's most heavily weighted sector,
dropped 0.8 percent, with Royal Bank of Canada losing
0.5 percent to C$79.64 and Bank of Montreal falling 0.6
percent to C$81.96.
    Shares of oil and gas producers declined 2.1 percent.
Canadian Natural Resources Ltd dropped 3.2 percent to
C$42.13, and Talisman Energy Inc declined 2.7 percent
to C$9.43.
    ($1=$1.12 Canadian)

 (Editing by Peter Galloway)