November 14, 2011 / 9:45 PM / in 6 years

CANADA STOCKS-TSX falls as Europe recession fears weigh

   * TSX down 52.66 pts, or 0.4 pct, to 12,224.19
 * Italy, Greece debt issues weigh
 * EU economic data sparks recession fears
 * Materials drag, financials little changed
 (Adds details, analyst's comments)
 By Jon Cook
 TORONTO, Nov 14 (Reuters) - European recession fears pulled
down Toronto's main stock index on Monday as poor economic data
and uncertainty about the ability of Italy and Greece to deal
with their debt woes weakened commodity prices.
 Industrial production in the European Union's 17-country
bloc fell 2 percent in September from August, overshadowing
hopes that new leaders in Italy and Greece would prevent their
economies from collapsing and avoid financial meltdown.
 "It might auger for soft numbers in Q4 and (be a) further
indication of a double dip in Europe," said Bob Gorman, chief
portfolio strategist at TD Waterhouse.
 Fears that Italy would not be able to repay its nearly 2
trillion euro debt ($2.7 trillion) resumed after a weak sale of
Italian five-year bonds and after its 10-year bond yields rose
closer to 7 percent, a level that had triggered previous
bailouts for Ireland, Portugal and Greece. [MKTS/GLOB]
 Ratcheting up the market's panic meter, German Chancellor
Angela Merkel said Europe may be living through its toughest
hour since World War Two. [ID:nL5E7MD0LU]
 Merkel's statement was backed up by the latest Organisation
for Economic Co-operation and Development index that showed
readings for the world's top economies fell for the seventh
straight month in September, hitting the lowest reading since
December 2009. [ID:nL5E7ME1M6]
 "There aren't a lot of positive data points surrounding
Europe," said Gorman, adding "it may prove to be the case that
this is the worst of times."
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE fell 52.66 points, or 0.4 percent to 12,224.19 after
briefly touching a session high of 12,342.03 early in the day.
 The negative performance followed Friday's gains that saw
the TSX jump more than 1 percent after Italy ushered out
longtime leader Silvio Berlusconi and Greece welcomed former
economist Lucas Papademos as its new prime minister.
 Eight of the TSX's 10 main sectors were lower, led by the
heavily weighted materials sector, which fell more than 1
percent as gold and commodity prices dipped. [GOL/] [COM/]
 "Those things that you'd expect to respond most to signals
of economic weakness were off the most," said Gorman.
 Barrick Gold Corp ABX.TO was the sector's biggest drag,
falling 1.1 percent to C$53.12.
 Goldcorp G.TO shares slid 1.2 percent to C$53.91, even
after Canada's second largest gold producer announced the
Quebec government had cleared its Eleonore project, which is
expected to boost the company's gold output by 600,000 ounces a
year. [ID:nN1E7AD16R]
 Energy issues fell 0.7 percent as oil prices were hit by
the EU's slowdown in production. [O/R]
 Canadian spot natural gas prices fell to their lowest level
in a year as Alberta short-term supplies grew and mild
temperatures limited heating demand. [ID:nN1E7AD1GU]
 Canadian Natural Resources Inc  CNQ.TO was the biggest
laggard, dropping 0.8 percent to C$37.37.
 After helping the TSX rally on Friday, Canadian base metals
mining stocks sagged 0.7 percent, with only copper bucking the
downward trend. [MET/L]
 First Quantum Minerals FM.TO was among the subindex's top
losers, dropping 2.2 percent to C$18.55.
 Ivanhoe Mines IVN.TO was one of the few miners to rise,
climbing 3.6 percent to C$21.49 after it reported a quarterly
profit and said construction at its Oyu Tolgoi copper-gold
project in Mongolia will be 70 percent complete by the end of
2011. [ID:nN1E7AD0CJ]
 The Canadian financial sector, which has minimal exposure
to European debt concerns, avoided a major drop and finished
little changed.
 "We're a long long way from any sort of resolution there,"
said Michael Sprung, president of Sprung & Co Investment
Counsel. "This week, we're likely to see very reactionary
markets, very volatile."
 Toronto Dominion Bank TD.TO led the sector's marginal
losses, falling 0.3 percent to C$72.22.
 In lieu of improvements from Europe, investors are hoping
for better news from Tuesday's U.S. October retail sales
numbers, which Gorman said would be a harbinger of what to
expect for the holiday shopping season.
 (Editing by Rob Wilson)

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