*TSX down 0.93 percent at 12,021.13
*Financials, resources lead index lower
By Claire Sibonney
TORONTO, April 22 (Reuters) - Toronto’s main stock index fell sharply on Thursday morning, ending a three-day rally, as worries over U.S. financial reform, debt-stricken Greece and monetary tightening in China combined to undermine confidence.
The index’s heavily weighted financial sector fell 0.9 percent as Royal Bank of Canada (RY.TO), the country’s biggest bank, slipped 0.7 percent to C$61.14, and Bank of Nova Scotia (BNS.TO) dropped 1.1 percent to C$51.60.
U.S. President Barack Obama in a speech in New York on Thursday was set to tell Wall Street to accept a sweeping bill to overhaul financial regulations.
“I think you’re seeing a fairly aggressive approach to financial reform as well as potentially politicizing Wall Street a bit, so I think a lot of people are taking a little bit of risk off the table,” said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.
“And at the same time, along with Greece, especially in terms of the euro and the commodity space, you’re seeing some weakness out of China, so I think all three of those factors are pretty much what’s driving the markets today.”
Data showed Greece’s budget deficit was worse than previously thought, which boosted the safe-haven U.S. dollar, pressuring gold prices. [GOL/]
Copper was also down after China, its top consumer, last week raised mortgage rates and down-payment requirements to cool growth in the property sector. [MET/L]
With soft metal prices, the index’s materials sector was down 1.2 percent. Barrick Gold Corp (ABX.TO), the world’s biggest bullion producer, fell more than 1 percent to C$39.08 and Teck Resources TCKb.TO, Canada’s biggest base-metals producer, slid 0.6 percent to C$41.46.
AT 10:16 a.m. (1416 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 113.43 points, or 0.93 percent, at 12,021.13. Eight of the 10 sectors were lower. In early dealing the index had fallen more than 1 percent.
Oil fell below $83 per barrel after higher U.S. inventories signaled demand in the world’s top oil consumer was sluggish despite the global economic recovery, sending energy shares down 1.2 percent.
Suncor Energy (SU.TO), the country’s largest oil producer, dropped 1.6 percent to C$33.52, while Precision Drilling Trust PD_u.TO sank 2.2 percent to C$7.48, after Canada’s No.1 oilwell-drilling company warned that average per day revenue would contract. [ID:nSGE63L0G7]
Shares of Celestica Inc (CLS.TO) were down 1.1 pecent at C$10.31, even though the contract electronics maker posted a 28 percent rise in adjusted quarterly earnings. [ID:nSGE63L0FU]
$1=$1.00 Canadian Reporting by Claire Sibonney, editing by Peter Galloway