August 2, 2011 / 3:03 PM / 8 years ago

CANADA STOCKS-TSX slips on slugglish economic data

   * TSX down 40.08 points at 12,904.94
 * Eight of 10 main sectors weaker, golds rally  (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, Aug 2 (Reuters) - Toronto’s main stock index slid on Tuesday morning as worries over the global economic recovery and euro zone debt crisis offset some relief about the long-awaited U.S. budget deal.
  Financials, the index’s most heavily weighted sector, dropped 1.2 percent and included the three most influential decliners. Royal Bank of Canada (RY.TO) lost 1.5 percent to C$50.16, Bank of Nova Scotia (BNS.TO) fell 1.9 percent to C$53.16, and Manulife Financial (MFC.TO) slipped 2.5 percent to C$14.80.
 The retreat came on the heels of tepid U.S. and global manufacturing data on Monday — when most Canadian markets were closed for provincial holidays.
  In economic data on Tuesday, U.S. consumer spending dropped in June for the first time in nearly two years, adding to worries the world’s largest economy would remain stagnant in the third quarter. [ID:nN1E7710A7]
 “The economic data that continues to filter out globally, whether it’s been China or Europe or North America, continues to point to sluggish if not slowing growth, which was modest to begin with,” said Paul Hand, managing director at RBC Capital Markets.
 “At least this morning, the glass is half empty ... and volumes are very, very light.”
 At 10:37 a.m. (1437 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 40.08 points, or 0.3 percent, at 12,904.94. Eight of its 10 main groups were lower.
 Energy and base-metal shares were weighed down by softer commodity prices, while precious metal miners jumped 2.3 percent as gold rallied to its ninth record high this year, pushing Goldcorp Inc (G.TO) up 2.1 percent to C$46.64.
 Concerns that Spain and Italy would be the next victims of the euro zone crisis also weighed on market sentiment.
 “The pattern continues and there’s not much incentive for people to do much,” said Hand. “In terms of corporate news ... earnings were generally pretty good but that has failed to really light a match because of the other macro economic stats as well as the ongoing U.S. follies.”
 An 11th-hour deal to raise the U.S. debt ceiling cleared its biggest hurdle in the House of Representatives, staving off the prospect of a debt default. But fears persisted that Washington could still lose its triple-A credit rating. [ID:nN1E76U0F5]
 In individual company news, Air Canada ACa.TO rose 3.8 percent to C$2.20 after it said it has reached a tentative contract agreement with its flight attendants. [ID:nL3E7J13HT]
 Canaccord Financial (CF.TO) fell 1.6 percent to C$12.70 after the investment bank and brokerage said on Sunday it agreed to buy half of Australian equities adviser BGF Capital Group Pty Ltd for A$40 million to expand into Australia and Hong Kong. [ID:nN1E76U0A8]
 ($1=$0.96 Canadian)  (Reporting by Claire Sibonney; editing by Rob Wilson)                                        

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