June 16, 2011 / 8:34 PM / 8 years ago

CANADA STOCKS-Greek default fears knock TSX to near 7-month low

   * Ends down 118.90 points, or 0.9 pct, at 12,853.13
 * Weakest close since November 23
 * Nine of the 10 main groups lower
 * Greek debt crisis, mixed U.S. data drag on sentiment  (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, June 16 (Reuters) - Toronto’s main stock index marked its lowest closing in nearly seven months on Thursday, as Greek default fears escalated and falling metal prices weighed heavily on influential mining issues.
 Anxiety that Greece’s debt and political turmoil could explode into another global financial crisis continued to undermine equity and commodity markets, as investors flocked to the safety of bonds and currencies such as the U.S. dollar.
 “There’s persistent anxiety about Greece and the potential for credit contagion and that’s overhanging the market,” said Fergal Smith, managing market strategist at Action Economics.
 The TSX’s materials group, home to miners, was the hardest hit. The group sank 2.8 percent, tracking lower with copper prices, which fell on a stronger U.S. dollar, fears of weak U.S. economic growth, and worries about the euro zone debt crisis. [MET/L]
 The base-metals subsector skidded 3.4 percent, as Teck Resources TCKb.TO dropped 3.6 percent to C$43.75 and First Quantum Minerals (FM.TO) retreated nearly 5 percent to C$115.37.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 118.90 points, or 0.92 percent, at 12,853.13. It was the weakest closing level since Nov. 23.
 Nine of the 10 main groups were down, including powerhouse energy shares, off 0.8 percent. Consumer discretionary stocks were up 0.1 percent.
 Potash Corp POT.TO was the most influential decliner, falling 3.4 percent to C$50.99 as the fertilizer producer was hit by sharply lower corn prices and concerns about waning demand. [ID:nN16531556]
 Gold miners were also sharply lower even as bullion prices steadied. Goldcorp Inc (G.TO) was down 2.9 percent to C$45.42, while Barrick Gold Corp (ABX.TO) lost 1.8 percent at C$42.27.
 International lenders dangled a lifeline to save Greece from defaulting next month as Prime Minister George Papandreou faced down rebels in his socialist party against EU/IMF-ordained austerity measures. [ID:nLDE75F0TU]
 Mixed U.S. economic data added to the gloomy mood. A gauge of regional manufacturing activity slumped to a near two-year low in June, suggesting U.S. factories were faltering and overshadowing better than expected readings on the labor and housing markets. [ID:nN16172420]
 Smith noted that speculation over rate hikes in China was also dragging on sentiment.
($1=$0.98 Canadian)  (Additional reporting by Trish Nixon; editing by Rob Wilson)                                        

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