TORONTO (Reuters) - Canada’s main stock index slumped to a one-month low on Wednesday, led by declines in financial and energy shares, as weak economic data from the euro zone and worries about the Cyprus bailout weighed on investor sentiment.
The losses were tempered by gains made by gold-mining stocks, benefiting from a jump in the price of bullion, whose appeal as a safe haven tends to increase on negative economic news.
Confidence in the euro zone’s economy dropped in March, falling after four straight months of gains, the European Commission said.
“Most parts of Europe show signs of an accelerating downturn,” said Matt Skipp, president of SW8 Asset Management. “I haven’t seen anything that gives me a strong degree of confidence in the European economies.”
“There’s lots of confidence building, but at the end of the day the economies actually have to heal.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 48.41 points, or 0.38 percent, at 12,657.97. It earlier fell to 12,622.50, its lowest level since February 27.
Eight of the 10 main sectors on the index were in the red.
Energy shares declined 0.7 percent as oil prices stumbled. <O/R>
The materials sector, which includes mining stocks, added 0.3 percent as gold stocks climbed. Gold prices were up on the bleak news out of Europe. <GOL/>
Gold shares, down about 16 percent since the start of the year, advanced 1.6 percent.
“I like them as buys,” Skipp said of gold stocks. “I see it as a nice entry point for the first time in a couple of years.”
In company news, the battle for Agrium Inc’s AGU.TO future intensified ahead of an April 9 vote after the two most influential proxy advisory firms disagreed on the candidates shareholders should back in the election for Agrium’s board of directors.
Shares of the fertilizer maker were down 2.8 percent at C$97.56.
Editing by Peter Galloway