April 4, 2012 / 12:47 PM / 5 years ago

TSX slides to 12-week low as resources sink

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

TORONTO (Reuters) - Sinking commodity stocks led Canadian equities to a near 12-week low on Wednesday, a day after the U.S. central bank crushed hopes for more monetary stimulus and as a weak Spanish bond auction signaled the effects of earlier European funding operations may be waning.

Big names on the downside included Suncor Energy (SU.TO), which plunged 4.5 percent to C$31.26, Goldcorp (G.TO), which lost 4.9 percent to C$40.98 and Barrick Gold (ABX.TO), which slid 3.2 percent to C$41.16 as the price of gold fell to its lowest levels in nearly three months. <GOL/>

“We’ve seen a steady decrease in optimism that the Fed would embark on easier monetary policy in recent weeks and the gold group has been under pressure ever since, so has gold for that matter,” said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver.

Energy companies were also hit by retreating oil prices, which ended about 2 percent lower, after testing key technical support levels. U.S. government data showed crude stockpiles in the world’s top consumer jumped last week to a nine-month high. <O/R>

Suncor in particular however was also hurt by news that its output was down more than 40 percent in March from February.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 145.02 points, or 1.18 percent, to 12,178.59. Earlier in the session, the index hit its weakest level since January 13.

Comments from European Central Bank President Mario Draghi that the euro zone’s economic outlook is subject to downside risks related to the debt crisis also dented risk sentiment.

The flight from stocks and commodities followed through on Tuesday’s selloff, after the Federal Reserve’s minutes from its March meeting suggested the appetite for a third dose of quantitative easing, so-called QE3, has decreased.

Meanwhile on Wednesday, Spanish borrowing costs jumped at bond auctions, raising concerns that the rally in troubled peripheral sovereign debt sparked by the European Central Bank’s two Long-Term Refinancing Operations may be coming to an end.

“We’ve seen headline risk out of Europe recede very sharply in recent months so anything that comes out that again refocuses attention on the issue tends to have a negative impact in markets,” added Picardo.

In other individual company news, shares of Canadian home-improvement retailer Rona Inc RON.TO slipped 1.2 percent to C$10.35 after the company said it was not for sale.

WestJet Airlines (WJA.TO) bucked the broader market trend, climbing 2 percent to C$13.62 after reporting it flew fuller planes in March despite higher fares.

Reporting by Claire Sibonney; Editing by Diane Craft

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below