Toronto stocks plunged for a second straight session on Friday, touching their weakest point since August 2010, as fears of a global recession hammered the resource-heavy market. While US stocks see-sawed, Toronto's main stock index at one point fell almost 4 percent, its worst intraday drop in more than two years.
The S&P/TSX composite index ended down 217.96 points, or 1.76 percent, at 12,162.17, led by a 2.46 percent drop in energy stocks. World stocks fell for an eighth day on Friday in a dizzying descent that has wiped around $2.5 trillion off the value of global equities this week, but hopes the European Central Bank will buy bonds of crisis-hit Italy helped lift markets off the lows of the day.
Toronto's sell-off followed a steep 3.4 percent drop on Thursday, the TSX's biggest one-day loss in two years, as markets world-wide fell prey to fears about slowing economic growth and the eurozone's debt crisis. The index was down more than 6 percent for the week. It has lost more than 15 percent since March 7, when it touched its 2011 high.
Friday's intraday fall - at one point more than 3.9 percent to 11,894.7 - was the biggest since June 2009. It marked the lowest level since August 2010. After energy, financial stocks, down 1.37 percent and materials shares including miners, off 1.62 percent, played the biggest roles in leading the market lower. Toronto Dominion Bank was the most influential decliner, down 2.2 percent to C$73.85, followed by Magna International. The auto-parts giant tumbled 11.8 percent to C$38.8 after posting a drop in second-quarter profit on a weak performance in Europe and cutting its profit margin outlook.
Suncor Energy was the No 3 decliner. It slid 2.4 percent to C$32.34, taking its lead from volatile US crude futures. Further weighing on the Toronto exchange, shares of Yellow Media Inc continued to slide, falling 12.7 percent to 96 Canadian cents after analysts cut their price targets on the Canadian phone directory publisher, which is struggling to make a transition to digital media.
Canada's top engineering company SNC Lavalin Group fell 5.28 percent to C$49.32 after reporting a 16 percent drop in quarterly profit on Friday dragged by lower contributions from its infrastructure segments. Positive North American jobs data did little to curb global growth fears. US job growth accelerated more than expected in July, while the Canadian unemployment rate fell in July to its lowest level since December 2008.
Nine of the index's 10 main groups were lower, barring the telecoms sector, which was helped by strong results from Telus Corp. The Canadian telecoms company reported a rise in quarterly net profit and increased its revenue forecast for the year. Telus shares were up 0.68 percent to C$51.63.
Some bright spots were also found among gold miners as the price of the precious metal resumed its five-week rally. Goldcorp was the most influential gainer on the index, up 1.1 percent at C$45.37, while Agnico Eagle climbed 1.96 percent to C$55.22.
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