July 8, 2011 / 3:08 PM / 8 years ago

CANADA STOCKS-TSX drops on bleak US jobs data, oils take hit

* TSX falls 0.38 percent to 13,355.36

* Seven index sectors ease, led by energy

* Canada’s bright jobs data clouded by U.S. gloom (Adds details)

TORONTO, July 8 (Reuters) - Toronto’s main stock market index was lower on Friday morning as disappointing U.S. jobs data for June hit sentiment, but the blow was softened by robust gold-mining issues, which flourished in a flight to safety.

Figures showed U.S. employment growth ground to a halt in June, dousing hopes the economy would regain momentum in the second half of the year. [ID:nOAT004829]

The U.S. data contrasted sharply with Canadian employment figures for June, which showed 28,400 jobs were created, compared with the 15,000 expected by markets. The Canadian unemployment rate was unchanged at 7.4 percent. [ID:nN1E767019]

“The economic environment is very different between the two countries,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Energy shares were the main drag in Toronto, falling 1.1 percent as the price of U.S. crude oil lost nearly 3 percent as markets reacted to the bleaker U.S. economic outlook. Top decliners included Canadian Natural Resources (CNQ.TO), down 2.7 percent at C$44.54, while Suncor Energy (SU.TO) lost 0.8 percent to C$38.90.

Offsetting the energy-induced slide were the gold miners, which advanced with a rally in precious metal prices spurred by the worries over the U.S. economy.

Barrick Gold (ABX.TO) gained 1.1 percent to C$44.78, while Goldcorp (G.TO) climbed 0.7 percent to C$48.80.

European Goldfields EGU.TO jumped 11 percent to C$13.67 after Greece granted a long-awaited permit to mine for gold in the country’s north, a move set to turn the London-based firm into the European Union’s largest primary gold producer. [ID:nLDE7670OL]

At 10:37 a.m. (1437 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 50.64 points, or 0.38 percent, at 13,355.36. Seven of its 10 main groups were lower. Materials, home to gold miners, was the main influential advancing group, up 0.1 percent.

The Toronto index was outperforming its key U.S. counterparts. The Dow Jones industrial average, Nasdaq and S&P 500 index were all off more than 1 percent.

“I still feel our market is more influenced more and more by China than what goes on in the U.S. because of the commodity bent,” Nakamoto said. ‘As long as the U.S. doesn’t go into recession, there’s a steady demand for our commodities.”

If the Chinese economy has a soft landing, commodity demand will remain healthy and support Canada’s resource-laden stock market, he said.

$1=$0.96 Canadian Reporting by Ka Yan Ng; Editing by James Dalgleish and Peter Galloway

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