August 1, 2014 / 11:34 AM / 5 years ago

TSX records biggest weekly decline since May

TORONTO (Reuters) - Canada’s main stock index fell on Friday and recorded its biggest weekly decline since early May, rattled by uncertainty about U.S. Federal Reserve’s interest-rate stance and by fears that Argentina’s debt default might signal broader instability.

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

Global markets have tumbled since the default by Argentina earlier this week, with geopolitical tensions exacerbating the negative sentiment. Market volatility has shot up in recent days as a result.

Data on Friday showed U.S. employers added fewer jobs than expected in July and the unemployment rate edged up. The market initially viewed that favorably, as a sign that the Fed may not raise rates anytime soon, before investor gloom took hold.

“Everyone is a little scared. This is the pullback we’ve been waiting for. This is it,” said Marcus Xu, portfolio manager and president at M.Y. Capital Management Corp in Vancouver.

“Selling will breed more selling,” he added. “I don’t think you want to jump in front of the train, at least not yet.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 115.48 points, or 0.75 percent, at 15,215.26. Eight of the 10 main sectors on the index were in the red.

Financials, the index’s most heavily weighted sector, gave back 1.1 percent. Royal Bank of Canada (RY.TO) lost 1.4 percent to C$79.37, and Toronto-Dominion Bank (TD.TO) declined 0.9 percent to C$56.52.

The gold-mining sector jumped 1.4 percent, with the price of bullion gaining after the U.S. jobs report. Barrick Gold Corp (ABX.TO) added 1 percent to C$19.89, and Goldcorp Inc (G.TO) advanced 1.4 percent to C$30.28.

Eldorado Gold Corp (ELD.TO) jumped 6.9 percent to $8.65, a day after the miner reported quarterly results.

Valeant Pharmaceuticals International Inc’s VRX.TO shares, which sold off on Thursday after the company cut its financial forecasts, rebounded a bit. They were up 1.1 percent at C$129.22.

Editing by Meredith Mazzilli; and Peter Galloway

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