TSX slips as China data weighs on resources

August 5, 2014

By John Tilak

TORONTO (Reuters) – Canada’s main stock index declined on Tuesday as weak economic data from China raised fears of a slowdown in the world’s second-biggest economy and weighed on shares of natural resource producers, for which China is a major market.

The Chinese survey indicated that growth in the services sector slowed sharply in July to near a nine-year low. The continuing crises in the Middle East and Ukraine also had a negative impact on the market.

The Toronto stock market’s resource-sensitive benchmark index shed 1.6 percent last week, and extended the fall on Tuesday as the prices of commodities such as gold and oil traded lower. The market was closed Monday for a holiday.

“The market is showing that it’s vulnerable,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management.

“I don’t think this is the end of the bull market,” he added. “I just think that it needs a little shaking out to bring people closer to reality.”

The Toronto Stock Exchange’s S&P/TSX composite index was down 45.26 points, or 0.30 percent, at 15,170. Six of the 10 main index sectors were higher, however.

Financials, the index’s most heavily weighted sector, gave back 0.3 percent. In the group, Bank of Nova Scotia lost 0.6 percent to C$73.01, and Toronto-Dominion Bank fell 0.4 percent to C$56.31.

Shares of energy producers followed oil prices lower, with Suncor Energy Inc slipping 0.8 percent to C$43.09.

The gold-mining sector dropped 1.8 percent, pulled lower by weakness in the bullion price. Barrick Gold Corp was down 2 percent at C$19.49, and Goldcorp Inc declined 1.7 percent to C$29.76.

Recent acquisitions helped Saputo Inc post a higher quarterly profit on Tuesday. Shares of the dairy producer climbed 1.2 percent to C$68.37.

($1=$1.09 Canadian)

(Editing by Peter Galloway)

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