July 10, 2014 / 11:40 AM / in 3 years

TSX stumbles on concerns over Portugal

TORONTO (Reuters) - Canada’s main stock index dropped on Thursday as worries about the financial woes of a major Portuguese bank spurred a selloff in equity markets globally and weighed on every major sector.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Investors were fearful of a contagion effect after shares in Banco Espirito Santo (BES), Portugal’s largest listed bank by assets, plunged more than 15 percent on growing concerns that financial troubles at holding companies of the bank’s founding family will have an impact on BES.

Shares of energy producers, which have been among the most influential gainers this year, showed a sharp decline on the Canadian benchmark index.

The Toronto market slipped on Monday and Tuesday on concerns about whether corporate earnings will be able to match expectations, but it rebounded a little in the previous session.

“The market was overdue for some kind of a pullback,” said Mario Richard, senior vice-president and investment strategist at Fiera Capital.

“Our view is that this is the bull market that will pursue its ascent, and we’re optimistic that eight to 12 months down the road the markets will be higher than where they are today,” he added.

The Toronto Stock Exchange’s S&P/TSX composite index was down 100.71 points, or 0.66 percent, at 15,114.48. All of the 10 main sectors on the index were in the red.

Shares of energy producers gave back 1.3 percent, with Suncor Energy Inc losing 1.4 percent to C$44.98 and Canadian Natural Resources Ltd declining 0.9 percent to C$48.56.

Financials, the index’s most heavily weighted sector, slipped 0.3 percent. Royal Bank of Canada fell 0.2 percent to C$78.34.

The gold-mining sector declined 1.8 percent, despite a rally in the bullion price. Goldcorp Inc dropped 1.5 percent to C$29.74, and Barrick Gold Corp shed 1.9 percent to C$19.76.

In corporate news, Cogeco Cable Inc reported a lower third-quarter profit and cut its full-year profit outlook. The stock was down 0.7 percent at C$58.75.

Editing by Meredith Mazzilli and Chris Reese

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