CANADA STOCKS-TSX tumbles as emerging-market fears grip investors

Fri Jan 24, 2014 5:05pm EST

* TSX falls 215.21 points, or 1.54 percent, at 13,717.76
    * Index down 1.2 percent this week
    * Eight of 10 main index sectors decline
    * Manulife has biggest negative influence on market

    By John Tilak
    TORONTO, Jan 24 (Reuters) - Canada's main stock index
recorded its biggest single-day drop in seven months on Friday
as fears over growth in China and expectations that the U.S.
Federal Reserve will scale back its stimulus program next week
hit emerging-market assets and dented investor sentiment.
    The fears about how developing markets will handle the Fed
rollback, combined with soft economic data from China, pushed
down the prices of some commodities, including oil and copper. 
    In turn, the resource-sensitive Toronto Stock Exchange
benchmark index fell for a second straight session and ended the
week 1.2 percent lower. The index also hit its weakest level in
a week.
    Ahead of Friday's selloff, the market had been gaining
steadily since the start of the year and hit a 2-1/2-year high
on Thursday. 
    "Markets are at pretty lofty levels and quite stretched. So
if you inject a little bit of risk aversion globally, it could
lead to a pullback," said Youssef Zohny, portfolio manager at
Stenner Investment Partners, a unit of Richardson GMP.
    He said some of the issues that have been thrown up could be
in the spotlight for the next several weeks.
    The benchmark S&P/TSX composite index was down
215.21 points, or 1.54 percent, at 13,717.76.
    "It's clearly not positive for Canada because some emerging
markets account for a lot of the commodity purchases," said
Lorne Steinberg, president of Lorne Steinberg Wealth Management.
    "One senses the air coming out of the balloon as investors
focus on risk," he added. "Sentiment can turn quickly, and that
alone can have a self-fulfilling prophecy when it comes to
markets."
    Eight of the 10 main sectors on the index were in the red on
Friday.
    Financials, the index's most heavily weighted sector, gave
back 1.6 percent. Manulife Financial Corp slid 4.3
percent to C$20.86 and had the biggest negative influence on the
market. Royal Bank of Canada shed 1.3 percent to
C$70.49.
    Shares of energy producers dropped 1.4 percent, with Suncor
Energy Inc slipping 2.4 percent to C$36.91.
    The materials sector, which includes mining stocks, fell 1.9
percent. Potash Corp was down 3.7 percent at C$35.19,
and Teck Resources Ltd stumbled 2 percent to C$26.61.
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