CANADA STOCKS-TSX falters as sluggish data renews recovery fears

Wed May 15, 2013 11:06am EDT

* TSX falls 88.33 points, or 0.70 percent, to 12,488.72
    * All of 10 main sectors decline
    * Gold shares lose 2.2 percent as bullion prices ease
    * RBC slips 1.3 percent to play market's biggest negative
influence

    By John Tilak
    TORONTO, May 15 (Reuters) - Canada's main stock index
retreated on Wednesday, hurt by declines across all major
sectors, after sluggish data from Europe and the United States
revived concerns about the global economic recovery. 
    Investors were disappointed after U.S. producer prices
recorded their largest drop in three years in April as gasoline
and food costs tumbled, and reports showed an unexpected drop in
U.S. factory output last month. 
    Germany's economy crept back into growth at the start of the
year but not by enough to stop the euro zone from contracting
for a sixth straight quarter, and France slid into recession.
 
    The weak data was a drag on prices of commodities like oil,
gold and copper.
    "People are worried about the recovery stumbling," said
Michael Sprung, president of Sprung Investment Management.
    "The numbers are indicating a knee-jerk reaction through the
market, which is affecting people's perceived demand for
commodities and prospects for manufacturing," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 88.33 points, or 0.70 percent, at 12,488.72.
All of the 10 main sectors on the index were in the red. 
    The materials sector, which includes mining stocks, slipped
1.5 percent, hurt by a decline in gold shares. 
    The gold sector, down 37 percent since the start of the
year, fell 2.2 percent as a strong U.S. dollar pulled down
bullion prices. 
    "With the economy faltering and the debt levels generally
rising, it's surprising to see the pressure continue on gold,"
Sprung said. He said the only explanation was that people are
looking for safety in the U.S. dollar and U.S. Treasuries.
    A fall in the price of oil sent energy shares down 0.9
percent. 
    Financials, the index's most heavily weighted sector, gave
back 0.8 percent.
    Royal Bank of Canada, the country's biggest bank,
fell 1.3 percent and played the biggest role in leading the
market lower.
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