March 12, 2012 / 2:53 PM / in 6 years

CANADA STOCKS-TSX drops on weak resources as China weighs

* TSX off 53.13 points, or 0.47 pct, at 12,444.49

* Seven of 10 main sectors lower

* Viterra rises 3.6 pct on takeover speculation

By Jennifer Kwan

TORONTO, March 12 (Reuters) - Toronto’s resource-heavy main stock index fell on Monday morning as Chinese economic data weighed on oil and metals prices, pressuring the market’s key mining and energy sectors.

Leading names on the downside included oil companies Canadian Natural Resources, down 2.1 percent at C$34.77, and Suncor Energy, which fell 1.4 percent to C$33.75. Barrick Gold shed 0.8 percent at C$45.09, while Teck Resources fell 1.6 percent to C$35.96

China’s trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel concerns about the extent to which frail foreign demand drove the drop.

“The markets are fidgety since the declaration of the lowering of the growth target,” said John Ing, president of Maison Placements Canada. Earlier this month, China cut its economic growth target to the lowest level in eight years, sending commodity markets sharply lower on demand worries.

Ing added, however, that the China trade data was a monthly data point and was more “noise than anything substantive”.

At 10:15 a.m (1417 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 53.13 points, or 0.47 percent, at 12,444.49, with seven of its 10 key sectors lower. The materials group fell 1.1 percent and the energy sector dropped 1.2 percent.

The slowdown in China’s exports in February heightened concerns that global demand is still weak, even as U.S. jobs data last week pointed to an improving economy, raising expectations that changes in monetary policy will be put on hold for now.

The U.S. Federal Reserve meets this week to discuss the likely course of monetary policy. The U.S. central bank has committed to leaving rates near zero until at least late 2014.

Gold slid on Monday, under pressure from a softer euro and from dwindling expectations that the Fed will signal the need for more measures to keep U.S. rates low. The lower euro undermines gold as it becomes more profitable for euro-based investors to take profit on their bullion holdings.

On the upside was Viterra Inc, Canada’s largest grain handler, which shot up 3.6 percent to C$14.07 after speculation Glencore is one of several parties interested in taking over the company. Glencore is a leading exporter of grain from Europe, the former Soviet Union and Australia.

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