CANADA STOCKS-TSX tumbles on Europe worries despite Spain deal
(Adds details, comments)
* TSX down 98.85 pts, or 0.9 pct, at 11,401.78
* Mining and energy shares lead losses
* Doubts linger after Spanish bank bailout
By Jon Cook
TORONTO, June 11 (Reuters) - Canadian stocks fell for the third straight session on Monday, led by energy and mining shares, after a relief rally on the rescue package for Spain's banks fizzled as investors worried that other euro zone countries also will need assistance.
Markets initially rose after euro zone policymakers agreed to lend Spain, the region's fourth-largest economy, up to 100 billion euros ($124.67 billion) to help prevent a run on the banks.
But equity markets retreated and Spanish and Italian bond yields rose on worries that existing bondholders could face losses in a debt restructuring if the euro zone's permanent bailout fund is used for the rescue.
"In a bear market, which we are in, any news is perceived as lousy news," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services. "The market wants to see a full-blown solution and any type of piece-meal solution is going to be turned around and considered negative."
Nine of Canada's 10 main sectors finished in the red. Losses were led by the heavyweight energy group, which fell 1.6 percent as oil prices reversed early gains to finish down more than $1 a barrel.
Suncor Energy fell 2.4 percent to C$28.33, Canadian Natural Resources lost 1.4 percent at C$27.70, and Cenovus Energy skidded 1.3 percent to C$32.05.
The materials sector, which includes miners, fell 1.3 percent as gold mining shares slumped with bullion prices as nervous investors opted for low-yielding government bonds.
The most influential decliners included Barrick Gold , which dropped 1.3 percent to C$39.60, Goldcorp Inc , off 0.8 percent at C$39.95, Potash Corp, down 1.2 percent to C$38.87, and Teck Resources, which dropped 2.6 percent to C$31.25.
The Toronto Stock Exchange's S&P/TSX composite index closed down 98.85 points, or 0.9 percent, at 11,401.78. It retreated nearly 200 points after touching a session high at 11,593.66.
Canadian financial stocks dipped 0.4 percent. Shares of Royal Bank of Canada, the country's largest lender, slid 0.6 percent to C$49.99. Bank of Nova Scotia also fell 0.6 percent to C$51.53.
"We were in the midst of a severe risk-off cycle that was kind of interrupted a little bit by the news over the weekend, but I think now we're reverting to the risk-off scenario," said Carlos Leitao, chief economist at Laurentian Bank Securities.
Banks were also hurt by uncertainty over the fate of Greece's future in the euro zone ahead of the next round of elections on Sunday. European finance officials have held a series of conference calls in recent weeks on contingency plans should Greece leave the euro, officials said. ($1=$1.03 Canadian) (Additional reporting by Allison Martel; Editing by Leslie Adler)
- Tweet this
- Share this
- Digg this