TORONTO (Reuters) - Toronto’s main stock index slumped on Monday, touching a one-week low, as renewed fears of a Greek default and the potential fallout for the broader euro zone pressured global equities and commodities.
The TSX’s heavyweight materials and energy sectors led the way down, as oil fell more than 2 percent and copper slid to a 2011 low on fears of slowing global demand.
Among the top decliners, First Quantum Minerals (FM.TO), dropped 8.4 percent to C$19.41, Canadian Natural Resources (CNQ.TO) fell 2.1 percent to C$33.48, and Teck Resources TCKb.TO was down 3.7 percent at C$37.65. <O/R> <MET/L>
“This Greek situation has got everybody kind of spooked,” said John Kinsey, portfolio manager at Caldwell Securities Ltd, noting the market seems to be preparing for Greece to default on its debt.
“A lot of people now are kind of resolved that it’s going to happen, but they’re hoping for the best, that it might be on a structured basis rather than just complete and utter chaos.”
European officials ended a weekend meeting without agreeing on new ways to tackle the debt crisis, and a call by U.S. Treasury Secretary Timothy Geithner at the meeting for more fiscal stimulus was rejected.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the session down 91.67 points, or 0.75 percent, at 12,172.04. During the session it fell to 12,117.77, its lowest point since September 12.
“The markets just trying to find a bottom,” said Bruce Latimer, trader at Dundee Securities. “I can tell you this, we’re getting close.”
Doubts about U.S. fiscal policy also soured market sentiment. President Barack Obama laid out a $3 trillion plan to cut U.S. deficits by raising taxes on the rich. But Republicans mocked it as a political stunt, signaling the proposal has little chance of becoming law.
Canadian banks performed relatively well compared with their U.S. and European counterparts, with Toronto’s financial sector ending down just 0.2 percent. Royal Bank of Canada (RY.TO) was the most heavily weighted advancer on the TSX, adding 0.7 percent to C$46.60.
In individual company news, short-sellers increased their pressure on Silvercorp Metals on Monday with new fraud allegations. The company dismissed the allegations as “baseless and designed to be manipulative”. Shares of the China-focused miner ended the day up 1 percent to C$6.88. S1E78I16M
Iamgold rose 1.7 percent to C$21.96 after the miner outlined promising drill results from exploration near its existing mines in Burkina Faso and Suriname and from a rare earth zone at its niobium mine in Quebec.
Gold miner Agnico-Eagle Mines (AEM.TO) said on Monday it will buy Mexico-focused junior explorer Grayd Resource Corp for about C$275 million to expand its reach at a time of soaring gold prices. Agnico shares rose 0.3 percent to C$67.20.
Editing by Jeffrey Hodgson and Peter Galloway