August 5, 2011 / 2:58 PM / 8 years ago

CANADA STOCKS-TSX resumes steep selloff despite jobs data

 *TSX down 135.88 points at 12,244.25
 *All 10 index sectors weaker
 *U.S. jobs data stronger than expected
 *Magna plunges 16 percent  (Updates with details, comments)
 By Claire Sibonney
 TORONTO, Aug 5 (Reuters) - Toronto’s main stock index fell sharply on Friday after a big selloff in the previous session as positive North American jobs data failed to calm fears that the world may be heading toward another recession.
 All 10 of the index’s sectors were down steeply, underperforming U.S. indices, which were also negative after an early rally. [.N]
 Among the three heavyweight groups on the index, energy shares dropped 2.1 percent, financials fell 0.6 percent, and materials lost 0.5 percent.
 Suncor Energy (SU.TO) was one of the most heavily weighted decliners, down 3.1 percent at C$32.10, taking its cue from volatile U.S. crude futures. [O/R]
 “You would have thought that we would had a bounce after yesterday,” said John Kinsey, portfolio manager at Caldwell Securities.
 Data on Friday showed U.S. job growth accelerated more than expected in July as private employers stepped up hiring, a development that might be expacted to ease fears that the U.S. economy is sliding into recession. [nOAT004847]
 Canadian jobs data showed the country’s unemployment rate fell in July to its lowest level since December 2008. [nN1E77404O]
 “It’s market sentiment that has really soured,” Kinsey added. “And it could persist a little further, but at some stage here we need to have a rally because I think the market is getting deeply oversold.”
 At 10:34 a.m. (1434 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 135.88 points, or 1.1 percent, at 12,244.25.
 The move followed a dramatic 3.4 percent drop on Thursday, the TSX’s biggest one-day loss in two years, as markets worldwide surrendered to fears about slowing economic growth and the euro zone’s debt crisis.
 Auto-parts maker Magna International (MG.TO) was the most heavily weighted decliner on the index, plunging 15.9 percent to C$37, after posting a lower second-quarter profit, as higher commodity costs and weak performance at some of its European operations offset higher sales. [nL3E7J52DB]
 Some gold-mining shares rose as the price of the price of the precious metal held firm. [GOL/]
 Barrick Gold Corp (ABX.TO) was up 0.9 percent at C$45.78, while Goldcorp Inc (G.TO) added 1.5 percent to C$45.56.
 “You still do have sovereign debt concerns lingering in Europe and things like that that are probably going to keep supporting gold for some time, even when we get economic data in the U.S. better than expected,” said Robert Kavcic, economist at BMO Capital Markets.
 ($1=$0.98 Canadian)  (With additional reporting by Trish Nixon; editing by Peter Galloway)                  

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