July 11, 2011 / 8:43 PM / 8 years ago

CANADA STOCKS-TSX dives to 1-week low on euro zone woes

   * TSX tumbles 191.95 points, or 1.44 percent, to 13,179.75
 * All 10 of the index’s main groups fall
 * Italy’s debt ratio sparks euro zone contagion fears  (Updates to close)
 TORONTO, July 11 (Reuters) - Toronto’s main stock index closed at its lowest level in more than a week on Monday, dragged down by fears the euro zone debt crisis could intensify and by weaker oil prices.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE tumbled 191.95 points, or 1.44 percent, to 13,179.75, with all of its 10 main index sectors dropping. It was the index’s biggest one-day fall since June 6, when it fell 1.47 percent.
 Six sectors dropped more than 1 percent, and one of the heftiest groups, oil and gas, sagged 2.6 percent.
 The slide followed a path set by markets around the world, which fell 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]
 “There’s more concern the European debt crisis might actually spread out to bigger countries,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver.
 “When you talk about countries like Spain or Italy, they’re huge, so if they have a government debt crisis...or even a risk of default, that’s stepping it up to a whole new level. Any kind of a rescue package is going to be extremely hard to obtain for those countries.”
 Oil and gas companies were led lower by Suncor Energy (SU.TO), the index’s most influential decliner, down 2.52 percent at C$38.30. Canadian Natural Resources (CNQ.TO) followed with a 2.45 percent drop to C$39.37.
 Energy firms, which make up roughly a quarter of the index, were hit by cooling oil prices, which fell on the European debt fears and on a drop in Chinese crude imports. [O/R]
 ($1=$0.97 Canadian)  (Reporting by Ka Yan Ng; editing by Peter Galloway)                                        

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