TSX falls as commodities weaken

The Toronto Stock Exchange was steeped in red Wednesday morning as commodity prices lost ground as amid investor jitters as protests in debt-ravaged Greece and Spain turned ugly.The S&P/TSX commodity index fell 64.65 to 12,192.53.The Canadian dollar fell 0.27 of a cent to 101.71 cents US as commodity prices failed to get a lasting boost from an improvement Tuesday in U.S. consumer confidence to its highest level since February.Wall Street markets were also lower, with the Dow industrial average down 16.31 points to 13,441.24, the Nasdaq fell 22.83 points at 3,094.9 and the broader S&P 500 index down 6.48 points to 1,435.11.A day after U.S. stocks suffered their biggest retreat in three months on comments from a leading official at the Federal Reserve, investors were spooked Wednesday by scenes of violent protests on the streets of Athens and Madrid, which reignited concerns over Europe’s ability to implement the measures needed to deal with its big debts.The developments in Europe overshadowed moderately positive data on the state of the U.S. housing market. The Commerce Department said sales of new homes in the United States dipped slightly in August from July but the median price of homes sold during the month rose by a record amount.New-home sales edged down to a seasonally adjusted annual rate of 373,000 in August, a dip of 0.3 per cent from July’s revised rate of 374,000. That had been the fastest pace since April 2010 when government tax credits were boosting sales.Meanwhile, a general strike in Greece turned violent after demonstrators protesting against planned government spending cuts threw molotov cocktails. A day earlier, clashes broke out at a similar demonstration in Madrid, which is also preparing new austerity measures.The Bank of Spain warned that the country is in a deep recession, saying the country’s economy continues to shrink “significantly.”“Europe has come back to the forefront this week in the absence of any other major news,” said Colin Cieszynski, senior market analyst, CMC Markets Canada. “The economic calendar remains very quiet and it appears that the bulls which had appeared so strong earlier in the month, have appeared to step back and await new developments.”Meanwhile, the benchmark New York oil contract was $1.44 lower at $89.93 a barrel, the December gold contract slipped $16 to $1,750.40 and the December copper contract fell five cents to $3.70.In Canadian economic news, the Conference Board of Canada said consumer confidence showed improvement this month, following a weak showing in August. The Ottawa-based economic forecaster says its Index of Consumer Confidence increased 6.7 points to 82.2.And in Canadian deals, Onex Corp. (TSX:OCX) is leading a $718-million deal to acquire a 4,000-employee German manufacturing company, the first European investment for the Toronto-based company’s flagship private equity fund. Onex shares fell 28 cents to $37.79.The main U.S. subsidiary of CGI Group (TSX:GIB.A) has received a five-year contract worth up to US$871 million from the Defense Information Systems Agency. CGI Federal Inc. will deliver a range of technology and business services, including engineering, scientific, testing, and logistics. Shares dropped 27 cents to $26.56.Investment manager AGF Management Ltd. (TSX:AGF.B) said Wednesday it lost $13.3 million or 14 cents per share in the quarter ended Aug. 31 compared with a profit of $15.4 million or 16 cents per share a year ago. Revenue totalled $119.8 million, down from $151.4 million. Shares fell nine per cent or $1.13 cents to $11.30.And shares of Research In Motion Ltd. (TSX:RIM) gained one per cent or seven cents to $6.57 on positive momentum from Tuesday when the company gave an update on the new BlackBerry 10 prototype and ahead of its quarterly earnings to be released Thursday.In Europe, Germany’s DAX was 1.9 per cent lower while the CAC-40 in France fell 2.4 per cent at 3,447. The FTSE 100 index of leading British shares was down 1.6 per cent.Earlier in Asia, Japan’s Nikkei 225 stock average closed down 2 per cent at 8,906.70 and Hong Kong’s Hang Seng dropped 0.8 per cent to end at 20,527.73. South Korea’s Kospi shed 0.6 per cent to 1,980.44. China’s Shanghai Composite Index shed 0.6 per cent to 2,004.17.

Leave a Reply

Your email address will not be published. Required fields are marked *