TORONTO (Reuters) - Toronto’s main stock index fell along with stock markets around the world on Monday after China signaled slower economic growth and the specter of recession in Europe was raised again.
Fears of declining demand pushed down Toronto’s resource-linked sectors, which combined comprise about 40 percent of the index. Leading the way down was diversified miner Teck Resources, TCKb.TO, which fell 6 percent to C$36.20 as the price of copper skidded after China, the world’s largest buyer of industrial metals, announced its lowest annual growth target in eight years.
Goldcorp (G.TO) fell 1.9 percent to C$47.65 as bullion prices sank, while Barrick Gold (ABX.TO) dropped 1.1 percent to C$46.38. Oil and gas producer Canadian Natural Resources (CNQ.TO) shed 2 percent to C$35.61 as investors sold shares on broader growth worries even though oil prices ticked slightly higher. <O/R>
The index’s materials and energy sectors fell 2.6 percent and 1.8 percent, respectively.
“It all comes down to China because China has cut its 2012 economic growth target to an eight-year low to 7.5 percent this year,” said Fred Ketchen, director of equity trading at ScotiaMcLeod. “That means copper producers probably won’t be called upon as frequently as they were to ship copper to China.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the day down 119.87 points, or 0.95 percent, at 12,523.95, with most of its 10 main sectors lower. The blue-chip S&P/TSX 60 index sank 6.14 points to 712.92.
The market was also hit by figures that showed a sharp downturn in purchasing activity in February among Italian and Spanish businesses, while Germany slowed and France stalled.
Also rattling market confidence were concerns over whether Greece will complete a bond swap with private creditors by Thursday as part of a deal to secure a 130 billion euro bailout and avoid a messy default. <MKTS/GLOB>
Upbeat data that showed the pace of growth in the U.S. service sector rose in February to its highest level in a year failed to stem Toronto’s losses.
In company news, pipeline operator Enbridge (ENB.TO) finished the day up 0.1 percent at C$38.33 even though a key segment of its oil pipeline system in the U.S. Midwest was expected to be shut for up to four days after a deadly vehicle accident in Illinois caused an oil leak and fire.
Shares of Research In Motion RIM.TO finished the day down 2.6 percent at C$13.25. An analyst said on Monday that RIM will be forced to slash the fees it charges carriers for BlackBerry service this year, as another U.S. government customer edged away from the service, cutting into a pillar of the struggling smartphone company’s business model.
Market observers were also watching the annual Prospectors and Developers Association of Canada convention in Toronto where exploration companies will be actively touting their assets to investors and larger producers.
Editing by Peter Galloway