TSX slides on nagging recession fears
By Claire Sibonney
TORONTO (Reuters) - Toronto's main stock index dropped sharply for a second day on Friday as financial and energy issues were hit by fears of a new U.S. recession and by a Bank of Canada warning on risks to the global economy.
The index reversed an earlier rally on the back of safe-haven golds, as U.S. markets also slipped further into the red after Hewlett-Packard's weaker outlook and corporate shakeup added to investor uncertainty.
Banks were the heaviest decliners on the TSX, down more than 3 percent. Toronto-Dominion Bank tumbled nearly 4 percent to C$71.10, Bank of Nova Scotia sank 4.3 percent to C$50.25, and Royal Bank of Canada lost 3 percent to C$48.97.
Ron Meisels, a technical analyst and president of Phases & Cycles in Montreal said some financials were showing "serious negative signals," after tumbling to near August 8 lows, a day characterized by panic selling spurred by the United States' loss of its triple-A credit rating.
"Given that we expect better days next week or so I would suggest taking that strength to sell into rallies the weak stocks and at the same time accumulate the gold and silver stocks because they might have a correction," added Meisels.
The Toronto Stock Exchange's S&P/TSX composite index ended down 179.24 points, or 1.47 percent, at 12,007.47, with eight of its 10 main sectors lower. On the week, the market sagged 4.3 percent.
Energy shares were also down sharply, sliding 2 percent, with Canadian Natural Resources off 2.4 percent at C$33.10.
"The market is clinging now to the hope that the (U.S. Federal Reserve) would engage in additional policy steps with (it) looking at Fed Chairman (Ben) Bernanke's speech at Jackson Hole next week," said Fergal Smith, managing market strategist at Action Economics. Continued...