TSX hits near 2-month low on Europe debt fears
By Jon Cook
TORONTO (Reuters) - Toronto's main stock index hit a near two-month low on Friday as resource-related issues fell after euro-zone debt downgrades and as another poor showing for Italian and German bond sales sparked fears about the European economy.
A slew of bad news from Europe and light trading due to the U.S. Thanksgiving holiday proved a bad combination for the commodities-heavy index, which suffered its worst weekly fall since early October, dropping more than 4 percent.
"In essence, Canada is a warrant on growth because of its 50 percent (weighting) in energy and materials in the index," said Gavin Graham, president at Graham Investment Strategy. "If you are worried about the outlook for growth, then that's going to reduce demand for commodities."
Oil and gas stocks led the index's losses, falling 0.7 percent as investor concerns that oil demand will be hurt by Europe's spreading debt crisis pushed crude prices to their second straight weekly loss.
Canadian Natural Resources CNQ.TO led the sector's fall, dropping 2.3 percent to C$33.96. Suncor Energy (SU.TO: Quote) fell 2.1 percent to C$28.14.
Gold and copper prices also fell, pulling down the index's heavily weighted materials sector 0.1 percent. Diversified miner Teck Resources Ltd TCKb.TO was a leading decliner, down 2 percent at C$32.66.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 23.26 points, or 0.2 percent, at 11,462.06. It was the index's lowest close since October 5.
The TSX is down more than 6 percent since the beginning of November, undermined by a parade of punishing news from Europe. Continued...