May 17, 2012 / 9:09 PM / 7 years ago

CANADA STOCKS-TSX shrugs off U.S., Europe worries

* TSX ends up 4.6 pts, or 0.04 pct, at 11,330.68
    * Gold miners lead gains; financials fall
    * Weak U.S. data boosts hopes of further Fed stimulus
    * Greek, Spain bank woes weigh on market

    By Jon Cook	
    TORONTO, May 17 (Reuters) - Canadian stocks ended a
four-session slide on Thursday, eking out a modest gain, as a
strong performance from gold miners offset financial losses on
soft U.S. economic data and mounting worries about Greece and
Europe's fragile banking sector.	
    Canada's sub-index of gold mining firms jumped nearly 6
percent as gold rallied for its largest one-day gain since late
    Gold's move allowed the Toronto Stock Exchange's S&P/TSX
composite index to outperform U.S. stocks, which hit a
four-month low on Thursday. 	
    "We've performed better than the U.S. markets today, which
has not been the case for much of 2012 to this point," said
Craig Fehr, Canadian market strategist at Edward Jones in St.
    Canada's top gold producers, Barrick Gold and
Goldcorp, led the day's gains, both rising 6.9 percent to
finish at C$38.16 and C$35.48, respectively. Smaller miners also
jumped, with Eldorado Gold rising 5.8 percent to
C$11.01 and Yamana Gold climbing 4.5 percent to
    Gold was also boosted by Wednesday's release of the U.S.
Federal Reserve's minutes from its most recent meeting in which
policymakers kept alive the possibility of a fresh round of
monetary stimulus for the moderately expanding U.S. economy.
    "Gold for a very long time now has been reflecting the
extremely easy monetary policies of the Fed and other central
banks around the world," said Fehr.	
    Weak U.S. data on Thursday supported the case for further
monetary easing. The Philadelphia Federal Reserve Bank said its
index gauging factory activity in the U.S. Mid-Atlantic region
unexpectedly dropped to a reading of minus 5.8 in May,
indicating contraction and the lowest level since last
September. Meanwhile, new U.S. jobless claims were flat at
370,000, slightly disappointing market expectations.
    The TSX finished virtually flat, up a mere 4.6 points, or
0.04 percent, at 11,330.68. It touched a session high at
11,421.83, a day after hitting a seven-month low at 11,298.46.	
    Thursday's gains were muted by jitters over political
turmoil in Athens, where politicians rejecting harsh austerity
measures are likely to win June 17 elections. Wednesday's move
by the European Central Bank to stop providing liquidity to some
Greek banks added to the pressure. 	
    "What's dominating the markets is fear of an uncontrolled
Greek exit from the euro," said Fergal Smith, managing market
strategist at Action Economics.	
    Worries about Spanish banks also resurfaced after a media
report said customers of Bankia had withdrawn more
than 1 billion euros ($1.27 billion) from their accounts in the
past week. The Spanish government said there had been no such
exit of deposits. 	
    Canadian financial issues, which could be vulnerable if
Greece were to suffer a disorderly default, fell 1.6 percent.
Toronto-Dominion Bank slid 1.6 percent to C$77.65 and
Royal Bank of Canada shed 2 percent to C$51.96.	
    RBC's drop came after a report that Canada's largest bank
was among a group of suitors which have put in initial bids to
buy the non-U.S. wealth management business of Bank of America
 in a deal that could be worth about $2 billion, sources
    Smith saw Thursday's boost being short-lived and expected
the TSX would eventually test last year's low of 10,848.19,
reached on Oct. 4, before staging a larger rally.	
    "The market will see increased support as that trough comes
into view."
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below