September 6, 2011 / 3:19 PM / 7 years ago

CANADA STOCKS-TSX dives as global economic worries mount

 * TSX down 193.73 points, or 1.5 percent at 12,408.68
 * Energy, banks lead decline
 * Gold mining stocks help offset losses
 By Trish Nixon
 TORONTO, Sept 6 (Reuters) - Toronto’s main stock market index joined U.S. stocks in falling sharply on Tuesday morning as concern mounted that the United States could fall into recession and that the euro zone’s sovereign debt crisis was worsening.
 European equities also dropped, extending the previous session’s 4 percent decline, with bank shares hitting a 29-month low on worries about the political handling of the euro zone debt crisis. [.EU] [MKTS/GLOB]
 “The North American markets and the TSX are reacting to the worries about European debt and the concerns over growth,” said Gavin Graham, president at Graham Investment Strategy. He added that U.S. and Canadian markets were catching up with the action elsewhere after being closed for the Labor Day holiday on Monday.   
 Friday’s U.S. jobs report, which showed zero net jobs growth in August, also hurt investor confidence. [.N]
 Energy shares led the TSX’s decline, falling 3.6 percent as investors shed risky assets. Brent crude prices rose on expectations of new stimulus measures for the U.S. economy, but U.S. crude was lower. [O/R]
 Suncor Energy (SU.TO) was the index’s top decliner, falling 3.7 percent to C$28.89, while Canadian Natural Resources (CNQ.TO) dropped 4.1 percent to C$33.50.    
 Economically sensitive financial stocks were down 2 percent, with Toronto-Dominion Bank (TD.TO) off 2.1 percent at C$75.57, and Bank of Nova Scotia (BNS.TO) down 2.4 percent at C$51.84.
 At 10:17 a.m. (1417 GMT) the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 193.73 points, or 1.5 percent, at 12,408.68. Earlier in the session it fell as low as 12,355.92, its weakest point since Aug. 29.
 Nine of the index’s 10 main sectors were lower. The materials group bucked the trend as gold-mining stocks jumped 3.1 percent, pushing the sector into positive territory.
 Gold prices fell from record highs after Switzerland’s central bank shocked markets by setting a floor for the euro/Swiss exchange rate in an effort to curb franc strength, but the metal was set for fresh gains as the franc’s safe-haven status waned. [FRX/]  [GOL/]
“People are being driven out of one safe haven, with the franc off a lot on the back of those comments from the Swiss National Bank, so where are you going to go? And the answer seems to be into gold,” Graham said.
Gold miners were the index’s most heavily weighted advancers. Barrick Gold (ABX.TO), up 4.3 percent at C$54.22, and Goldcorp (G.TO), up 2.9 percent at C$55.29, topped the list.
($1=$0.99 Canadian)  (With additional reporting by John McCrank; editing by Peter Galloway)                  

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