March 18, 2010 / 3:16 PM / 9 years ago

CANADA STOCKS-TSX dips as China, Greece worries resurface

*TSX down 0.2 percent at 12,076.19

*Materials, energy, financial shares lead index lower

By Claire Sibonney

TORONTO, March 18 (Reuters) - Toronto’s main stock market index was lower on Thursday morning after touching a 17-month high the day before as concerns about tighter credit in China and doubts about an aid plan for debt-stricken Greece pressured commodity prices.

Miner Teck Resources TCKb.TO was down almost 1 percent at C$41.59, and Ivanhoe Mines (IVN.TO) fell 0.66 percent to C$16.57 as base metal prices were hit by worries over the impact of China’s latest efforts to cool markets. [MET/L]

The index’s heavily weighted financial sector dropped 0.15 percent, extending losses from Wednesday on uncertainty over proposed, stricter banking regulation in the United States.

Toronto-Dominion Bank (TD.TO) fell 0.71 percent to C$74.01, while Royal Bank of Canada (RY.TO), the country’s biggest bank, lost 0.1 percent at C$59.40. Both banks have large U.S. operations.

The index’s energy sector dropped 0.55 percent.

Concern arose over efforts by China’s central bank to mop up a massive 213 billion yuan ($31 billion) in liquidity in its open market operations this week, while a report on Thursday quoted a Greek official saying the country was not optimistic about aid from euro zone members. [ID:nTOE62H02T] [ID:nATH005287].

“The market has paused today because we had a degree of apprehension around European support for Greece, measures taken by China to control lending and that’s spilled over to commodity markets,” said Fergal Smith, managing market strategist at Action Economics.

“Crude oil is traded lower and base metals have traded lower. That’s helped cap the resource sectors on the TSX,” he said.

At 10:36 a.m. (1436 GMT) the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 24.47 points, or 0.2 percent, at 12,076.19. On Wednesday, it touched 12,122.47, its highest level since September 2008.

On the upside, U.S. data showed flat inflation figures for February, which lent support to the U.S. Federal Reserve’s plan to keep interest rates low for an extended period. Weekly U.S. jobless claims dipped.

“Tame inflation data and another dip in jobless claims are both pretty friendly for asset markets and give the Fed plenty of scope to leave their policy rate near zero,” Smith said.

Gold prices were steady on safe-haven buying, pushing shares of gold producers higher. [GOL/]

Barrick Gold Corp (ABX.TO), the world’s biggest gold producer, was up 0.42 percent at C$40.75, while Goldcorp Inc (G.TO) gained 0.42 percent to C$40.45.

$1=$1.01 Canadian Reporting by Claire Sibonney, editing by Peter Galloway

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