Resource stocks weighed heavily on the Toronto stock market as commodity prices tumbled Monday in the wake of data showing much weaker than expected economic growth in China.
The S&P/TSX index plunged 215.96 points, or 1.8%, to begin Monday at 12,121.63
The Canadian dollar weakened 0.65 cents at 97.95 cents U.S.
The world’s second-largest economy grew by 7.7% over a year earlier, down from the previous quarter’s 7.9%. That fell short of many private sector forecasts that growth would accelerate slightly to 8%.
In corporate news, QLT Inc. is planning to distribute $200 million U.S. cash to its shareholders, or about $3.95 per share, assuming it gets shareholder and other approvals. QLT shares hiked 59 cents, or 7%, to $9.00, in the day’s first hour.
Centrica PLC of Britain and Qatar Petroleum International will pay about $1 billion cash to acquire a majority of Suncor Energy’s conventional natural gas and crude oil assets in three western provinces.
Suncor says the deal excludes the majority of its unconventional natural gas properties in the Montney region of British Columbia and its Wilson Creek unconventional oil assets in Alberta. Suncor shares slipped $1.02, or 3.5%, to $27.82
Barrick Gold continued to slide on the TSX, down $2.45 or 10.7% to $20.49 after losing 15.45% last week, giving up its title of world’s largest gold miner by market cap, having been overtaken by Goldcorp Inc. Goldcorp faded $1.70, or 5.7%, to $28.37.
In addition to falling gold at the end of the week, Barrick shares dropped heavily earlier in the week after a Chilean court suspended its Pascua-Lama mine after indigenous communities complained that the project is threatening their water supply and polluting glaciers.
The energy sector fell hard with Canadian Natural Resources giving back $1.07, or 3.4%, to $30.21.
On the economic front, figures released this morning by the Canadian Real Estate Association showed national home sales edged upward on a month-over-month basis in March 2013 but stayed well below levels recorded one year ago. CREA said national home sales rose 2.4% from February to March. Actual (not seasonally adjusted) activity came in 15.3% below levels in March 2012.
ON BAYSTREET
The TSX Venture Exchange plummeted 43.07 points to 979.54
All but four of the 14 Toronto subgroups went south in the first hour, metals and mining stocks taking the biggest pasting, down 8.2%, while gold stocks suffered 8.1%, and materials slid 6.7%.
The four gainers were led by telecoms, ahead 0.3%, information technology stocks, gaining 0.2%, and real-estate, eking up 0.1%.
ON WALLSTREET
Investors awoke to disappointing news that China's economic growth had slowed in the first quarter. U.S. stocks opened lower and commodities plunged, with gold prices sinking 6%.
The Dow Jones Industrials Average descended 84.75 points to begin the day and the week at 14,780.30
The S&P 500 index fell 11.70 points to 1,577.15. The tech-heavy NASDAQ Composite moved down 22.07 points to 3,272.88
Meanwhile, investors are also gearing up for a big week on the earnings front.
Citigroup reported a better-than-expected 30% jump in net income, to $3.8 billion U.S. Revenue also topped forecasts, rising 6% in the latest quarter.
Goldman Sachs, Bank of America and Morgan Stanley are on tap to report results later this week. Tech giants will also report results later this week, with Yahoo, Google and Microsoft all on deck.
In corporate news Monday, Dish said it is bidding $25.5 billion U.S. to buy Sprint Nextel, countering an agreement between Sprint and Japan's Softbank. Sprint's stock price surged 15.8% in morning trading.
Thermo Fisher Scientific signed an agreement to acquire Life Technologies in a deal valued at $13.6 billion U.S., plus debt. Life Technologies shares rose 8% and Thermo Fisher rose 4%.
In U.S. economic news, the New York branch of the Federal Reserve released its monthly manufacturing survey showing that conditions for New York manufacturers improved slightly in April. The indexes for general business conditions and new orders remained positive, despite modest month-to-month declines.
Prices on the 10-year U.S. Treasury gave up some ground, lifting yields to 1.73% from Friday’s 1.72%. Treasury prices and yields move in opposite directions.
Oil prices sank $1.99 to $89.31 U.S. a barrel.
Gold prices sank $92.50 to $1,408.90 U.S. an ounce.
