* TSX falls 267.45 pts, or 2.1 pct, at 12,252.06
* Higher U.S. dollar drags down commodities
* Copper, gold, oil prices slide more than 1 pct
* Miners, energy firms sink
* TSX still up 5.4 pct on month
By Jon Cook
TORONTO, Oct 31 Canadian stocks got spooked on
Monday, falling more than 2 percent, with sliding commodities,
Japanese market intervention, the failure of a major brokerage
and Europe's lingering crisis all making investors jittery.
A surprise move by Japan to weaken its currency by buying
U.S. dollars, caught the market off guard and had a negative
trickle-down effect on equities, commodities and other risky
"We did not expect to wake up to see the Japanese buying
currency," said Brendan Caldwell, chief executive of Caldwell
Investment Management Ltd. "At the moment of actual crisis,
there is no substitute for the U.S. dollar, nor will there
likely be for the foreseeable future."
Adding to the market's worries, U.S. futures broker MF
Global filed for bankruptcy on Monday.
Renewed doubts about the euro zone's debt crisis plan also
helped put an abrupt end to October's stock market rally.
The Toronto Stock Exchange's S&P/TSX composite index , dropped 267.45 points, or 2.1 percent, at 12,252.06.
It was the TSX's worst daily decline in nearly a month.
Still, the index finished October up 5.4 percent, its
biggest one-month gain since May, 2009.
Nine of the Canadian market's 10 main sectors were lower,
led by a 3.41 percent drop in energy stocks, which fell as oil
prices slipped in low-volume trading.
Suncor Energy , down 4 percent to C$31.75, and
Canadian Natural Resources , down 3.9 percent to
C$35.16, were two of the biggest drags on the index.
The Potash Corp was the biggest laggard, falling
5.1 percent to C$47.18. Potash and other mining stocks pulled
the heavily weighted materials sector down 3.1 percent.
"They all seem to move in a pack and today the pack is
going south," said David Baskin, portfolio manager and
president of Baskin Financial Services.
First Quantum Minerals , down 6.1 percent to
C$20.91, was another big drag.
Base metals such as copper slipped as the dollar rose and
enthusiasm for Europe's debt deal gave way to the view that the
region's economic problems are far from over.
Barrick Gold , down 2.6 percent to C$49.21, was
also a big weight. Fresh on the heels of its best weekly
performance in a month, gold fell more than 2 percent as a
spike in the U.S. dollar spooked precious metals investors.
Canadian banking shares were also hurt by "lack of details
coming out of Europe on how they're going to execute this
plan," Baskin said.
Canadian financial stocks were down 1.4 percent. Royal Bank
of Canada led the sector down, falling 2.1 percent to
C$48.62. Insurer Manulife Financial also dropped 3.8
percent to C$13.16.
Telecom stocks, a traditional safe-haven play, were up 0.5
percent. Bell Aliant gained 1.1 percent to C$28.06, BCE
Inc rose 0.7 percent to C$39.51, and Rogers
Communications gained 0.3 percent to C$36.35.
In other company news, Grande Cache Coal shares
jumped 68 percent after it agreed to be acquired by Winsway
Coking Coal and Marubeni Corp in a C$1 billion ($1 billion)
deal fueled by demand from China's steelmakers.
TMX Group shares rose more than 3 percent after the
operator of Canada's largest stock market threw its support
behind a C$3.8 billion takeover offer from a group of banks and
Pacific Northern Gas Ltd shares spiked more than
20 percent after it agreed to bought by AltaGas Ltd
for about C$145 million.