CANADA STOCKS-TSX nears three-week low on emerging market fears

Mon Jan 27, 2014 4:50pm EST

* TSX falls 135.47 points, or 0.99 percent, to 13,582.29
    * Nine of 10 main index sectors decline
    * Scotiabank has biggest negative influence on market
    * BMO slips after making offer to buy UK fund manager

    By John Tilak
    TORONTO, Jan 27 (Reuters) - Canada's main stock index
dropped on Monday to its lowest in almost three weeks, hit by a
selloff in emerging market equities that was triggered by
concerns about Chinese economic growth and the U.S. Federal
Reserve's stimulus program. 
    Data out of China has shown signs of weakness in the world's
second-biggest economy and weighed on global equities.
    Investors also eyed the U.S. Federal Reserve ahead of a
policy meeting this week to decide whether the central bank will
further scale back its stimulus measures.
    A recent slump in the Turkish lira and declines in other
emerging market currencies and equities that began last week
spread to Canadian stocks as well, causing investors to avoid
riskier assets.
    The Toronto market traded in the red for a third straight
day, following its biggest single-day drop in seven months in
the previous session, and turned negative for the year.
    "Investors are suddenly fixated on the risk aspect, and
anything now seems like a looming crisis," said Elvis Picardo,
strategist and vice president of research at Global Securities
in Vancouver.
    "If the emerging markets situation worsens, it does throw a
spanner into the works, but it's too early to tell," he added.
"Overall the feeling seems to be that this is a mere blip, and
not a very big correction."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 135.47 points, or 0.99 percent, at
13,582.29, after touching 13,520.51, its lowest since Jan. 7.
    Nine of the 10 main sectors on the index were in negative
territory.
    Financials, the index's most heavily weighted sector,
dropped 1.6 percent. Bank of Nova Scotia slipped 2.2
percent to C$61.69 and had the biggest negative influence on the
market. Royal Bank of Canada gave back 1.6 percent to
C$69.38.
    BMO Financial Group declined 2.1 percent to C$70.46
after the lender made a preliminary offer to buy British fund
manager F&C Asset Management for 697 million pounds
($1.2 billion) in cash. 
    Shares of gold miners reflected declines in the price of
bullion. Barrick Gold Corp fell 2.6 percent to C$20.61,
and Goldcorp Inc shed 2.5 percent to C$25.93.
    Weaker oil prices weighed on sentiment for shares of energy
producers, which fell 1.4 percent. Suncor Energy Inc was
down 1.6 percent, at C$36.32.
    In other corporate news, Hudson's Bay Co said that
it would sell its flagship downtown Toronto store and
neighboring executive offices for C$650 million ($587.09
million) to Cadillac Fairview Corp and open a full-line Saks
store in the leased-back space. HBC shares gained 1.2 percent to
C$16.89.
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