CANADA STOCKS-TSX drops on last day of worst quarter since 2008

Fri Sep 30, 2011 5:34pm EDT

 * TSX falls 62.48 points, or 0.53 percent, at 11,623.84
 * Seven of 10 sectors weaker; energy weighs, golds support
 * Index down 9 pct for the month, 12.6 pct for quarter
 * Sharpest monthly decline since Oct 2008
 By Trish Nixon
 TORONTO, Sept 30 (Reuters) - Toronto's main stock index
fell on Friday, closing off its worst month and quarter in
nearly three years, as a raft of disappointing data and the
lack of a solution to Europe's debt crisis stoked fears of a
global economic slowdown.
 The index plummeted 12.6 percent in the quarter and 9
percent in September, its worst monthly slide since the height
of the credit crunch in October 2008 and worst quarterly slide
since the end of that year.
 Stocks were battered by signs of a global economic slowdown
and fears that a debt default by Greece could spark a credit
shock similar to that caused by the collapse of Lehman Brothers
in September 2008.
 "What's driving the Canadian economy and in particular the
Canadian equity market at this particular point in time, no
doubt, is a lack of visibility on the global macro scene,"
Paul Taylor, chief investment officer at BMO Harris Investment
Management Inc, said on a conference call.
 "The question is, is there a comprehensive plan that will
emerge in the short to intermediate term related to the
solvency of key sovereigns in euro land?"
 Fears of a hard landing in China, the world's second
largest economy, joined the witches' brew troubling investors
after figures showed China's manufacturing sector shrank for
the third month in a row. [ID:nL3E7KU097]
 "China is the X-factor that the market is currently worried
about," said Christophe Caspar, chief investment officer for
Europe, Middle East and Asia, at Russell Investments.
 "We're not talking about China collapsing, but growth in
China of 6 percent versus the (current) 9 percent is big enough
to put the world tipping into recession."   
 The Chinese data added to fears about slowing global demand
and pressured commodity prices, which weighed on the
resource-heavy TSX index. [O/R] [MET/L]
 Suncor Energy (SU.TO) was the heaviest decliner on the TSX,
falling 3.4 percent to C$26.76. Potash Corp (POT.TO) was down
3.5 percent at C$45.50, and Canadian Natural Resources (CNQ.TO)
lost 2.4 percent to C$30.77.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended the session down 62.48 points, or 0.53 percent,
at 11,623.84. Seven of the index's 10 main groups were lower.
 Gold miners helped to curb losses, lifting the index's
materials sector into positive territory as the price of
bullion rose. The price of the metal posted its biggest
quarterly gain this year even though it looked set to end
September with a loss of more than 10 percent, its worst
monthly performance since October 2008. [GOL/]
 Goldcorp (G.TO) was the index's top gainer, rising 4
percent to $48.07, followed by Barrick Gold (ABX.TO), up 2.3
percent at $49.11.
 The index lost more than C$170 billion of total market cap
this quarter, according to Thomson Reuters data. Caspar said
that he expected further volatility through to the end of the
year, but that equity markets should not fall that much further
given the current inexpensive levels.
 "The key worry that the market has is politicians don't go
fast enough in ring-fencing the problem," he said. 
 "Greece defaulting is basically a certainty. The question
is how is it going to default. Is it going to be a messy
default or an orderly default? The market is already pricing in
an orderly default."
 ($1=$1.05 Canadian)
 (Editing by Peter Galloway and Jeffrey Hodgson)
















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