December 12, 2013 / 4:13 PM / 7 years ago

CANADA STOCKS-Fed fears pull TSX to nearly eight-week low

* TSX falls 25.87 points, or 0.20 percent, to 13,107.55
    * Seven of 10 main index sectors decline
    * Gold-mining shares hit 10-year low
    * Fortis drops after move to acquire UNS Energy
    * Iamgold slips after suspending dividend

    By John Tilak
    TORONTO, Dec 12 (Reuters) - Canada's main stock index
dropped on Thursday to its weakest point in nearly eight weeks
after a flurry of economic data from the United States raised
fears that the Federal Reserve might soon begin rolling back its
monetary stimulus program.
    The sharpest decline was felt in the gold-mining sector,
which slumped to a 10-year low.
    The market also was dragged lower by a fall in the shares of
Fortis Inc after the company on Wednesday agreed to
acquire Arizona-focused utility UNS Energy Corp for
about $2.5 billion in cash.
    U.S. retail sales rose in November as Americans bought
automobiles and a range of other goods, but the number of
Americans filing new claims for unemployment benefits also
climbed last week, according to two separate reports. 
    Investors have been trying to figure out the implications of
the economic data for the Fed's next monetary policy move.
     "The market is very much fixated on tapering," said Subodh
Kumar, chief investment strategist at Subodh Kumar & Associates,
who sees a Fed stimulus rollback starting as early as January. 
    "There is room for markets to pull back, and I don't think
the Canadian market will be immune to that," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 25.87 points, or 0.20 percent, at 13,107.55,
after reaching 13,059.74, its weakest level since Oct. 18.
    However, market strategists expect solid growth in the
Canadian benchmark next year, a Reuters poll found, as the
global economic recovery takes hold and boosts shares of natural
resource companies. 
    Seven of the 10 main sectors in the index were in the red on
    Financials, the index's most heavily weighted sector,
slipped 0.4 percent. Bank of Nova Scotia declined 0.6
percent to C$62.79 and had the biggest negative influence on the
market. Royal Bank of Canada lost 0.3 percent to C68.24.
    In corporate news, miner Iamgold Corp said on
Wednesday it has suspended its dividend payments until further
notice. The stock fell 6.6 percent to C$3.80.
    With the price of bullion tumbling 2.4 percent, gold-mining
companies' shares slid 1.3 percent. The sector reached its
lowest point in about a decade. 
    Goldcorp Inc shed 0.7 percent to C$22.26, and Barrick
Gold Corp slipped 0.4 percent to C$17.23.
    "A lot of the damage to the bullion has already been done,"
Kumar said. "But we can't say (gold stocks) have bottomed out as
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