Toronto stock market falls; miners sell off amid plunging copper prices
TORONTO - The Toronto Stock Exchange closed lower Tuesday, dragged down by base metal miners as worries about Chinese growth slammed copper prices for a third day, leaving the metal at its lowest level in almost four years.
The S&P/TSX composite index declined 34.83 points to 14,267.23, with support coming from financials and gold miners.
The Canadian dollar dipped 0.01 of a cent to 90.07 cents US.
New York's Dow Jones industrials fell 67.43 points to 16,351.25, the Nasdaq dropped 27.26 points to 4,307.19 while the S&P 500 index declined 9.54 points to 1,867.63.
The TSX energy and base metal sectors continued to lose ground amid concerns about Chinese growth as data released over the weekend showed that exports of the world's second-biggest economy fell by an unexpectedly large 18 per cent in February. The country's official 2014 economic growth target of 7.5 per cent assumes trade also will grow by 7.5 per cent.
"As an investor looking forward, you have to ask yourself if 7.5 per cent (economic growth) is sustainable," said Kash Pashootan, a portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company.
"Our view is that 7.5 per cent is not sustainable. What is in question is how quickly will it decline from 7.5 per cent. But if you believe 7.5 per cent is not sustainable, it does not bode well for commodity prices and the overall TSX."
Copper prices closed lower for a third day as a result of the data. The May copper contract on the New York Mercantile Exchange was down another eight cents at US$2.95 a pound on Tuesday, its lowest close since June 2010 after shedding six per cent over the previous two sessions. Copper has plunged 14 per cent so far this year.
The base metals sector fell 3.43 per cent, with sector heavyweight Teck Resources (TSX:TCK.B) down 83 cents or 3.49 per cent to C$22.97 while Turquoise Hill Resources (TSX:TRQ) tumbled 39 cents or 8.9 per cent to $3.99.
The energy sector fell 1.22 per cent as oil prices also suffered from the Chinese data. On Tuesday, the April crude contract on the New York Mercantile Exchange was down a further $1.09 to US$100.03 a barrel.
The TSX financials sector rose 0.78 per cent with Scotiabank (TSX:BNS) up 84 cents or 1.3 per cent at $64.82.
The gold sector climbed about 0.4 per cent as April bullion gained $5.20 to US$1,346.70 an ounce.
On the corporate front, Fortress Paper Ltd. (TSX:FTP) plunged 12.92 per cent to $2.83 as the company posted a quarterly loss of $54.7-million or $3.76 a share as it wrote down the value of property, plant and equipment at a Quebec cellulose mill. Ex-items, Fortress had an adjusted net loss of $21.2 million or $1.46 per share in the quarter, compared with a loss of $11.2 million or 77 cents per share a year earlier. Its revenue dropped to $37.2 million from $58.7 million a year before.
In New York, General Motors dipped 5.15 per cent to US$35.18. A U.S. congressional committee is investigating the way the automaker and a federal safety agency handled a deadly ignition switch problem in compact cars.
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