Canadian stocks ended sharply lower Monday, on increased worries over the eurozone debt crisis with focus on Spain and Greece, and led by mining and financial issues. In Spain, yields on 10-year government bonds surged above 7.5 percent, notching a new euro-era high.
Speculations were rife in Germany that the International Monetary Fund was preparing to stop aid payments to the Greece, fueling fears that the country could default by September. Nonetheless, the IMF has rubbished such concerns, while indicating continued support for the beleaguered country in overcoming its financial problems.
Toronto's main index, the S&P/TSX, closed Monday at 11,545.54, down 77.37 points or 0.67 percent. The S&P/TSX Composite Index touched an intraday high of 11,609.89 and a low of 11,416.49.
The major decliners on the S&P/TSX Index were the Metals & Mining Index, the Materials Index, and the Financial Index. The only gainer was the Energy Index, helped mainly by surge in Nexen Inc. (NXY.TO) shares.
The Metals & Mining Index dropped 3.24 percent with Lundin Mining Corp. (LUN.TO) shedding 3.61 percent, while Teck Resources Limited (TCK.B.TO) surrendered 2.58 percent. First Quantum Minerals (FM.TO) lost 4.01 percent.
Gold futures for August delivery dropped $5.40 or 0.3 percent to close at $1,577.40 an ounce Monday on the NYMEX.
The Global Gold Index shed 1.87 percent, while the Capped Materials Index fell 2.02 percent.
Among gold stocks, Goldcorp Inc. (G.TO) shed 1.67 percent, Barrick Gold Corp. (ABX.TO) slipped 2.35 percent, and Kinross Gold Corp. (K.TO) lost 1.59 percent.
Fertilizer maker Potash Corporation of Saskatchewan Inc. (POT.TO) shed 0.65 percent.
Transportation systems maker Bombardier Inc. (BBD.B.TO) slipped 1.54 percent, while Blackberry maker Research In Motion Limited (RIM.TO) gained 1.46 percent.
U.S. crude oil futures for September delivery, shed $3.69 or 4 percent to close at $88.14 a barrel Monday on the NYMEX.
The Energy Index gained 2.33 percent with Nexen Inc. (NXY.TO) soaring 52.40 percent after Chinese oil giant CNOOC Ltd. (CEO) said it would acquire the company for $27.50 per share in cash.
Canadian Natural Resources Limited (CNQ.TO) slipped 0.03 percent, while Suncor Energy Inc. (SU.TO) was down 0.13 percent. Encana Corp. (ECA.TO) gained 3.71 percent.
Upstream oil and gas company Talisman Energy (TLM.TO) soared 6.79 percent after revealing plans to divest 49 percent equity interest in its UK North Sea business, Talisman Energy (UK) Ltd. to Sinopec International Petroleum Exploration and Production Corp. for $1.5 billion.
The Financial Index was down 1.59 percent with Royal Bank of Canada (RY.TO) edging down 1.70 percent, Bank of Nova Scotia (BNS.TO) down 1.46 percent, and Toronto-Dominion Bank (TD.TO) edged down 1.19 percent.
Building construction company Churchill Corp. (CUQ.TO) dived over 28 percent after reporting preliminary revenue estimates for second quarter 2012 between C$292 million and C$298 million.
In economic news, the eurozone government debt rose to 88.2 percent of gross domestic product in the first quarter from 87.3 percent in the previous quarter, Eurostat reported Monday. At the end of first quarter, securities other than shares accounted for 78.3 percent of euro area general government debt.
The Spanish economy sunk deeper into recession in the second quarter, the Bank of Spain said. In its quarterly estimates, the Bank of Spain said the economy would have contracted 0.4 percent sequentially in the second quarter, sharper than the 0.3 percent contraction reported in the first quarter of 2012 and the final three months of 2011.
Spain's bailout concerns have pushed its borrowing costs to euro-era highs, continuing to remain above the danger threshold of 7 percent despite the Eurogroup's approval of 100 billion euros bailout for Spanish banks Friday.
Spain's 10-year yield climbed to a euro-era high of around 7.57 percent on Monday after media reports said Murcia could emerge the second Spanish region to seek government aid after Valencia. Speculation is rife in the Spanish media that six regions out of the 17 are likely to seek financial assistance from the government.
Thus far, Spain has sought aid only to prop up its troubled banking system. The latest string of negative news has fueled concerns that the country may be forced to seek an international bailout for its entire economy.
by RTT Staff Writer
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