TSX drops broadly on Europe fears

Fri May 7, 2010 5:47pm EDT
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By Cameron French

TORONTO (Reuters) - Canadian stocks fell hard on Friday as investors, fearing a growing Greek debt crisis and shaken by Thursday's stock plunge, sold shares across all industry groups and made the Toronto market's main TSX index negative on the year.

With mystery still surrounding the reasons for Thursday's 3.8 percent intraday drop, market players rushed to lighten equity holdings.

"We're still in the aftershocks of yesterday's spectacular plunge," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"Yesterday would shake people's confidence. ... Greece and the whole European mess doesn't seem to be resolved. There's a lot of uncertainty and managers' normal reaction to uncertainty is to sell, take money off the table."

Resource stocks led the way as oil prices extended a week-long slide on concerns that Greece's debt woes would infect other euro zone countries and jeopardize global economic recovery.

The energy sector dropped 1.2 percent, pulled down by Suncor Energy SU.TO, which dropped 1.4 percent to C$31.92, and EnCana Corp ECA.TO, which retreated 1.1 percent to C$31.60.

Mining stocks fell 1.9 percent despite a late rally in copper prices and strong gold prices, underscoring investor uneasiness with equities.

Barrick Gold ABX.TO eased 3.1 percent to C$44.70, pulling back from a five-month high, while Iamgold IMG.TO fell 2 percent to C$18.47 even after it said its quarterly profit rose 12 percent on higher gold prices.   Continued...