TSX tumbles as China data hits commodities

Thu Jan 20, 2011 5:31pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Solarina Ho

TORONTO (Reuters) - Toronto's main stock index closed lower for a second straight day on Thursday as robust Chinese growth data weighed on commodity prices, prompting fears the roaring economy could spur Beijing to tighten monetary policy to fight inflation.

China's fourth-quarter growth sailed past expectations to rise to 9.8 percent, sparking a global selloff in equities and pulling down commodity prices, as investors worried the world second-largest economy would move to choke off excessive demand.

Leading the decline in Toronto was a 2.07 percent slump in the materials group, home to mining companies. Potash Corp fell 3.05 percent to C$161.14, while fellow fertilizer producer Agrium Inc was down 3.75 percent at C$87.22.

Base-metals miner Teck Resources Ltd. slid 3.35 percent to C$60.27. Uranium giant Cameco Corp fell 4.27 percent to C$38.10, while Barrick Gold was off 1.51 percent at C$46.81.

"The commodities had blown up to a pretty high level and the market was looking for an excuse to sell off, and the Chinese news was probably that excuse," said Douglas Davis, chief executive of Davis-Rea.

Copper prices notched their biggest one-day loss since mid-November as a stronger U.S. dollar added to the downward pressure from concerns over China, the world's biggest consumer of the metal.

Gold prices also fell to two-month lows as the U.S. dollar rose and investment demand for the safe-haven metal waned following strong U.S. economic data that indicated two key economic trouble spots -- the housing market and employment -- were on the mend.

The Toronto Stock Exchange's S&P/TSX composite index finished the day down 107.72 points, or 0.8 percent, at 13,331.32. Eight of its 10 main groups ended lower.   Continued...

 
<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>