July 10, 2012 / 4:19 PM / 7 years ago

CANADA STOCKS-TSX falls as China fears offset Europe hopes

* TSX down 40.27 pts, or 0.35 pct, at 11,594.40
    * Materials, energy sectors fall 1 pct
    * Weak China import data hurts commodity prices
    * Spanish bank deal pares losses
    * RIM down 4 pct as shareholder meeting begins

    By Jon Cook
    TORONTO, July 10 (Reuters) - Canadian stocks slid at midday
on Tuesday, led lower by mining and energy shares after weak
Chinese import data raised slowdown fears about the world's top
consumer, offsetting earlier gains on a bailout deal to help
Spain's embattled banks.
    Investors fretted about a hard landing for the world's
second largest economy as data on Tuesday showed Chinese import
growth slowed sharply in June to 6.3 percent, well short of the
forecast for a 12.7-percent increase. 
    The news was not a good harbinger for China first-half GDP
data to be released later this week.
    "We're in a kind of strange period where markets need
something to get them kickstarted," said Barry Schwartz, vice
president and portfolio manager at Baskin Financial Services.
    Investors have been hoping the recently weak economic data
in China and the United States would spur increased stimulus
action from their central banks. Last week China cut interest
rates for the second straight month, but the U.S. Federal
Reserve did not follow suit, despite another disappointing jobs
    On Tuesday, St. Louis Federal Reserve Bank President James
Bullard told an audience in London that the U.S. economy is
still some way from needing more asset-buying stimulus.
    Canada's heavily-weighted materials sector, which includes
miners, dropped 1.2 percent. The equally influential oil and gas
group slid 1 percent.
    The biggest drags on the market included: Barrick Gold
, off 1.5 percent at C$36.80; Potash Corp,
falling 0.8 percent to C$45.47; Cenovus Energy, down
0.9 percent at C$32.62, and Canadian Natural Resources,
which dipped 0.9 percent to C$26.07.
    At noon EDT (1600 GMT), the Toronto Stock Exchange's S&P/TSX
composite index was down 40.27 points, or 0.35
percent, at 11,594.40. It touched a session high at 11,706.68
shortly after the open.
    The China data overshadowed some progress in Europe's battle
to control its debt crisis. Spanish bond yields backed off 7
percent - a level which has forced other countries to seek a
bailout - after an all-night meeting of euro area finance chiefs
agreed on a deal which will release 30 billion euros ($36.9
billion) of bailout funds for Spain's troubled lenders by the
end of July. 
    Market watchers were also optimistic Germany's top court
would ultimately approve the European Union's new permanent
bailout fund, enabling a more flexible use of the latest rescue
    Canadian financial shares initially rose, but by late
morning were flat as euro zone efforts failed to assuage
concerns about the region.
    Bank of Nova Scotia led losses, falling 0.4 percent
to C$52.75. Bank of Montreal, the country's largest
lender, was up 0.4 percent at C$57.33.
    Research In Motion Ltd shares fell more than 4
percent to C$7.47 on Tuesday as the beleaguered maker of the
BlackBerry held its annual shareholder meeting, with Chief
Executive Thorsten Heins promising to turn RIM into a "lean,
mean hunting machine." 
    RIM recently posted its first operating loss in eight years
and has delayed the planned launch of the next-generation
BlackBerry 10 - which RIM hopes will reverse its sinking market
share - until early next year.
    "RIM is going the way of the Betamax and the other
technologies that could not catch up with the changing whims of
technology," said Schwartz. "Their new BlackBerry 10 might be
the best product known to man, but it can't come out fast enough
to satisfy the consumer."
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