CANADA STOCKS-Commodities drive TSX to 2011 low, bear territory

Fri Sep 23, 2011 11:25am EDT

 * TSX falls 131.07 points, or 1.13 percent, to 11,431.44
 * Index touches lowest point since July 2010
 * Seven of 10 sectors lower; golds, energy weigh
 By Trish Nixon
 TORONTO, Sept 23 (Reuters) - Toronto's main stock index hit
its lowest level since July, 2010 on Friday, pushing the market
into bear territory, as investors sold riskier assets on
growing fears of a Greek debt default and global recession.
 Concerns about a global economic slowdown battered the
commodities complex for a second day, pressuring the
resource-heavy Canadian stock index.
 The materials group tumbled 3.3 percent as base-metal
miners continued to slide and as gold fell to a 6-1/2 week low,
setting the stage for its sharpest weekly drop since Dec 2008.
[MET/L] [GOL/]
 "It's a U.S. dollar thing ... when people get really really
panicked, the U.S. dollar, there is no substitute. Gold to a
large extent is the flip-side of the U.S. dollar," said
Brendan Caldwell, chief executive of Caldwell Investment
Management Ltd.
 "Gold stocks have fallen right out of bed with gold, and
that's what's really pulling our market."
 Barrick Gold (ABX.TO) was the heaviest decliner, down 4
percent at C$48.20, while GoldCorp (G.TO) fell 3.9 percent to
C$47.20.
 At 10:35 a.m (1435 GMT) the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 131.07 points, or
1.13 percent, at 11,431.44. It touched a session low of
11,355.82, its weakest since July 2010.
 The index has fallen more than 6 percent in the last three
sessions and is now down more than 20 percent from its 2011
peak, which is generally viewed as the definition of a bear
market.
 A pledge by G20 leading economies to shore up the financial
system failed to alleviate fears of a Greek default and global
economic slump.
 European banking shares suffered after Deutsche Bank said
the region's banks may take a bigger-than-expected hit from a
swap arrangement on Greek government debt. [MKTS/GLOB]
 Seven of 10 main groups on the TSX were lower. Energy
issues stocks were down 1.2 percent, tracking the price of oil
as Brent crude fell to a six-week low near $103 a barrel.
Canadian Natural Resources (CNQ.TO) fell 2 percent to C$30.28.
[O/R]
 The financial sector traded flat. Royal Bank of Canada
(RY.TO) was the index's most influential advancer, up 0.4
percent to C$45.56, while Bank of Nova Scotia (BNS.TO) rose 0.4
percent to C$50.18.
 "If everybody was worried about the world coming to an end
our banks would be under pressure today, and they're up
modestly," said Caldwell.
 (Editing by Jeffrey Hodgson)