May 7, 2010 / 8:51 PM / 9 years ago

CANADA STOCKS-TSX drops broadly on Europe fears

 * TSX falls 150 points, or 1.27 pct, at 11,692.43.
 * Investors fearful after Thursday plunge
 * Euro zone contagion fears still weigh
 * Index falls five straight days, down 4.2 pct on week
 By Cameron French
 TORONTO, May 7 (Reuters) - Canadian stocks fell hard on Friday, as investors fearing a widening Greek debt crisis and shaken by Thursday’s stock plunge sold shares across all industry groups, pulling the TSX index negative for the year.
 With mystery still surrounding the magnitude of the previous session’s 3.8 percent intraday drop, market players rushed to lighten equity holdings.
 “We’re still in the aftershocks of yesterday’s spectacular plunge,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
 “Yesterday would shake people’s confidence. ... Greece and the whole European mess doesn’t seem to be resolved. There’s a lot of uncertainty and managers’ normal reaction to uncertainty is to sell, take money off the table.”
 Resource stocks led the way as oil prices extended a week-long slide on concerns that Greece’s debt woes will infect other euro zone countries and jeopardize the global economic recovery.
 The energy sector dropped 1.2 percent, pulled down by Suncor Energy (SU.TO), which dropped 1.4 percent to C$31.92, and EnCana Corp (ECA.TO), which retreated 1.1 percent to C$31.60.
 Mining stocks fell 1.9 percent despite a late rally in copper prices and strong gold prices, underscoring the market’s unease with equities. Barrick Gold (ABX.TO), eased 3.1 percent to C$44.70, pulling back from a five-month high, while FNX Mining FNX.TO retreated 3.9 percent to C$11.15.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE fell 150.00 points, or 1.27 percent, 11,692.43.
 For the week, it dropped 4.2 percent, losing ground in each session and falling below its Dec. 31, 2009 levels for the first time since March.
 Euro zone contagion fears more than offset a report that showed a record number of Canadians returned to work in April, adding pressure on the Bank of Canada to raise interest rates in June, ahead of other major industrialized countries. [ID:nN0793308]
 The market’s sharp intraday drop in the previous session — from which the index recouped nearly all the losses to close down 0.28 percent on Thursday — prompted regulators to cancel or re-price about 220 trades that took place at the bottom off the plunge.
  ($1=$1.04 Canadian)  (Reporting by Cameron French; Editing by Frank McGurty)   

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