November 10, 2011 / 5:14 PM / 7 years ago

CANADA STOCKS-TSX turns negative as resources drag

 * TSX down 56.59 points, or 0.5 pct, at 12,099.63
 * Materials, financials drag on index
 * EU debt fears weigh on commodity stocks
 * N.American data helps offset losses  (Adds analyst comment, details)
 By Jon Cook
 TORONTO, Nov 10 (Reuters) - Toronto’s main stock index touched a one-week low on Thursday, sliding with commodity prices and hurt by investor uncertainty about Europe’s ability to get ahead of its debt crisis.
 Canadian stocks extended losses as lower copper and other base metals prices pulled down the heavily-weighted materials sector, which fell 1 percent. [MET/L]
 “The liquidity has come out of the market a lot so it’s not hard to move this market around plus or minus 1 percent on very little,” said Paul Hand, managing director at RBC Capital Markets. “There’s obviously massive headline risk on any given day.”
 Italy paid its highest yield in 14 years to sell 12-month debt and while there was relief the sale went smoothly, worries festered that Italy’s borrowing costs were unsustainable. The selection of a new leader in Italy added to investors’ jitters. [MKTS/GLOB]
 At 11:30 a.m. (1530 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 56.59 points, or 0.5 percent, at 12,099.63, clawing back some gains after falling more than 1 percent to a session low of 12,025.57.
 The index had dropped 2.7 percent the previous session, its biggest fall in a month, as Italian bond yields rose above 7 percent and sparked widespread selling.
 Five of Canada’s top main sectors were negative, led lower by materials and financial stocks.
 Base metals miners fell nearly 1.6 percent, led by First Quantum Minerals (FM.TO), down 6.5 percent to C$18.48.
 Shares of Silver Standard Resources SSO.TO also weighed as they plunged to their lowest point in nearly three years, a day after the company cut the reserves at its Pirquitas mine in Argentina by more than half. [ID:nNL3E7MA0XP]
 Canadian lenders, which have less exposure to risky European debt holdings than their global counterparts, were down slightly, with the wider financial sector dipping 0.3 percent.
 Canadian Imperial Bank of Commerce [CM.TO] was the biggest drag, falling 1.2 percent to C$71.78.
 Helping to offset losses, economic data showed new U.S. jobless claims declined for the second straight week to the lowest level since April and the trade deficit unexpectedly shrank in September, pointing to a slight improvement in the sluggish economy. [ID:nN1E7A90IR]
 In Canada, a surge in energy exports also led to an unexpected trade surplus in September, the first since January 2011, prompting analysts to predict the economy would return to growth in the third quarter. [ID:nN1E7A90DQ]  (Editing by Jeffrey Hodgson)                 

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