TSX hits 4-month low as golds sell off

Fri Jul 2, 2010 5:59pm EDT
 
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By Ka Yan Ng

TORONTO (Reuters) - The TSX hit its lowest level in more than four months on Friday as resource issues, particularly gold miners, stumbled heavily.

Gold shares were reeling after bullion prices were hit hard on Thursday, when Canadian markets were closed. The index's materials sector, which includes golds, was down more than 3 percent.

Gold-mining issues were the main drag on the index even though bullion prices rebounded a bit on Friday. Thursday's fall was triggered by heavy selling by funds trying to cover losses in other markets.

Barrick Gold (ABX.TO: Quote) was off 4.9 percent at C$45.95, while Goldcorp (G.TO: Quote) was off 5.7 percent at C$43.95.

"The gold stocks are unfortunately catching up to that decline in gold price from yesterday, which is why we're seeing really large drops in some of the major gold producers," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver

Mining issues failed to get a lift from news that Australia dumped its proposed "super profits" tax on the sector in favor of a lower resource rent tax.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 98.36 points, or 0.87 percent, at 11,196.06. The decline gave the index a weak start to the second half of the year after losing more than 6 percent in the second quarter, the vast chunk in the past few weeks.

It was off 4.4 percent for the week.   Continued...

 
<p>Bay Street signs are seen in the heart of the financial district in Toronto in this August 17, 2009 file photo. REUTERS/Mark Blinch</p>