July 11, 2011 / 3:38 PM / in 6 years

CANADA STOCKS-TSX slumps 1 pct on euro zone contagion fears

   * TSX down 161.53 points, or 1.21 pct, at 13,210.17
 * All 10 of the index's main groups lower
 * Italy's debt ratio sparks euro zone contagion fears
 By Solarina Ho
 TORONTO, July 11 (Reuters) - Toronto's main stock index
fell more than 1 percent on Monday morning in a broad-based
retreat led by energy issues, battered by fears the euro zone
debt crisis could widen and by weaker oil prices.
 Oil and gas companies slumped 2.11 percent, with Canadian
Natural Resources CNQ.TO the index's most influential
decliner, down 2.82 percent at C$39.22. Suncor Energy SU.TO
followed with a 1.96 percent drop to C$38.52, while Talisman
Energy TLM.TO rounded up the top three heaviest decliners
with a 4.34 percent tumble to C$18.54.
 Energy firms, which make up roughly a quarter the market's
index, were hit by cooling oil prices, which fell on fears that
the European debt crisis could spread to other euro zone
countries and by a drop in Chinese crude imports. [O/R]
 At 10:47, the Toronto Stock Exchange's S&P/TSX composite
index .GSPTSE was down 161.53 points, or 1.21 pct, at
13,210.17. All 10 of its main groups were lower.
 The slide followed a decline on global markets, which
tumbled on worries that Italy -- the euro zone's third-largest
economy -- could be the next casualty of the region's debt
crisis. Italy has the euro zone's highest sovereign debt ratio
relative to its economy, after Greece. [MKTS/GLOB]
 A weaker than expected U.S. jobs report on Friday and data
showing China's import growth fell to its slowest pace in 20
months also encouraged investors to sell riskier assets.
 "A lot of pressure on the markets: Friday saw a really
lousy jobs number and we didn't get any satisfaction over the
weekend with issues in Europe, nor with the (U.S.) debt
ceiling. So those are not promising things to start the week
off with," said Barry Schwartz, vice-president and portfolio
manager at Baskin Financial Services.
 Schwartz added that second-quarter earnings from the United
States could provide further direction later in the week, but
expected global issues would remain dominant.
 "I think that's (earnings) put to the sidelines though, and
people are focusing on these macro issues ... So I would expect
markets to stay skittish throughout the whole summer. Investors
have to live with the volatility," Schwartz said.
 The economically sensitive financials group was down 1.07
percent, with Manulife Financial MFC.TO leading the slide.
The insurer retreated 2.61 percent to C$16.43. Toronto-Dominion
Bank TD.TO was not far behind, falling 1.36 percent, to
 The influential materials sector, home to mining firms,
gave back 1.61 percent. Potash Corp POT.TO was down 2.11
percent at C$55.69 while diversified miner Teck Resources
TCKb.TO retreated 3.03 percent to C$48.63.
 ($1=$0.97 Canadian)
 (Editing by Rob Wilson)

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