TORONTO (Reuters) - Toronto's main stock index sank on Tuesday and hit a near two-week low earlier in the day as mining and energy stocks were hit by fears about a slowdown in demand from top resources consumer China.
Copper and other industrial metals prices slumped after BHP Billiton (BLT.L), the world's biggest miner, said it was seeing signs of a slowdown in iron ore demand from China. Earlier this month, China cut its 2012 economic growth target to an eight-year low of 7.5 percent. <MKTS/GLOB><MET/L>
"There is some concern that China's economy has slowed. In my view they need to ease monetary policy further in China," said Patricia Mohr, vice president, economics and commodity market specialist at Scotiabank.
"Given the slowdown in industrial activity and also the big moderation in inflation in China, both of those developments really argue further easing of monetary policy to boost the economy."
Canadian base metals mining shares finished down 1.2 percent, led lower by major copper miner Teck Resources TCKb.TO, which skidded 2.3 percent to C$35.74.
Canadian Natural Resources (CNQ.TO) fell 1.9 percent to C$34.84 and Suncor Energy (SU.TO) was down 1.2 percent to C$33.05 as the price of oil plummeted nearly 2 percent on comments by Saudi Arabia.<O/R>
"The energy minister in Saudi Arabia said that he would offer additional crude to anyone who needed it. Basically he's trying to calm oil markets about the potential loss of Iranian supplies this year," said Mohr.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 49.00 points, or 0.39 percent, to 12,340.70, after hitting a near two-week low of 12,336.89. Nine of its 10 main sectors fell.
Even news of one of the year's largest takeover deals failed to lure investors into the market. Shares of Canada's largest grain handler, Viterra VT.TO, fell 0.4 percent to C$15.91 after Glencore (GLEN.L), the world's No. 1 commodities trader, said it has agreed to buy Viterra in a cash deal that values it at C$6.1 billion. Viterra was the most heavily traded issue on the TSX market.
Potash Corp (POT.TO) soared nearly 4 percent to C$46.40, cushioning the broader market's fall. The world's top fertilizer producer was boosted after potash marketing consortium Canpotex said on Tuesday it has signed a contract with Sinofert Holdings (0297.HK) to supply the Chinese fertilizer maker with 500,000 tonnes of potash in the second quarter of 2012.