TSX tumbles on weak China data, Gasfrac, Augusta Resource in focus
Toronto's main market was lower Tuesday afternoon as crude oil and copper dropped on worries of slowing demand from China amid weaker import figures in the country.
As of after 1:00pm ET, the S&P/TSX Composite Index fell 137.85 points, or 1.15%, to 11,880.65, while the more junior S&P/TSX Venture Composite declined 22.23 points, or 1.53%, to 1,426.42.
China's exports rose 8.9% over a year earlier to US$165.6 billion, while imports grew 5.3% to $160.3 billion, well below China’s growth levels in recent years.
Investors are concerned that Chinese demand has slowed following government initiatives to ease inflation and foster growth, which could weigh heavily on the resource-heavy Canada index. The latest reading on Chinese economic growth is due on Friday.
Commodities were mixed, with gold for June delivery up 0.74% to $1,656.0 an ounce, and crude oil for May down $1.26 to $101.2 a barrel.
Silver futures rose 0.35% to $31.64 an ounce while the base metal copper contract gave in by 1.6% to $3.66 a pound.
In Toronto, energy, financials and industrials were the biggest decliners, while materials and metals and mining posted gains.
The energy sector was weighed down on the price of crude, as Suncor Energy (TSE:SU), Talisman Energy (TSE:TLM), and Trican Well Service (TSE:TCW) fell 2.2%, 2.46%, and 4.3%, respectively.
In materials, First Quantum Minerals (TSE:FM) gained 3.2%, alongside Kinross Gold (TSE:K) and Barrick Gold (TSE:ABX), which moved higher by 1.7% and 1.8%, respectively.
Eastern Platinum (TSE:ELR) lost 3.7% and Lundin Mining (TSE:LUN) fell 2.3%.
Financials were also down around 1% as Toronto Dominion Bank (TSE:TD) declined 1.07%, and Royal Bank (TSE:RY) retreated 0.87%. Insurer Manulife Financial (TSE:MFC) lost 2.3%.
In industrials, Bombardier (TSE:BBD.B) fell almost 1%.
Research in Motion (TSE:RIM) (NASDAQ:RIMM) also dropped 1.5% in the info-tech sector.
In Canadian corporate news, Gasfrac Energy Services (TSE:GFS) saw its shares plunge more than 20% after it said late Monday that it expects first quarter revenues and profit before income taxes to be lower than the fourth quarter, citing an early spring break up in Canada and low activity in the US.
Meanwhile, Augusta Resource Corp. (TSE:AZC) shares rallied after it said it received a key environmental permit for its Rosemont copper project in Arizona.
Gold producer Alexis Minerals (TSE:AMC) said Tuesday that since initiating its turnaround plan for the Lac Herbin Mine in Val D’Or, Quebec production levels and cash costs have stabilized.
Calgary-based oil and gas producer Vero Energy (TSE:VRO) said Tuesday that it has boosted its annual production guidance, citing the success of first quarter drilling. The company, which is focused on the cardium light oil play in Western Canada, raised its production outlook for 2012 to between 2,500 to 2,700 barrels of oil equivalent per day (boed). That is up from its prior forecast of 2,300 to 2,500 boed.
US/Europe
US equities fell sharply, with the Dow lately down almost 180 points as worries about the health of the global economy became increasingly prominent.
Borrowing costs in Spain and Italy continue to rise, with yields on Spain's 10-year bonds just under 6%, while in Italy, yields were near 5.7%.
Stocks rallied in the US in the first quarter, but analysts are predicting a pull-back ahead of the first quarter financial results season, which kicks off later today with Dow component Alcoa (NYSE:AA).
Investors are becoming more and more concerned with the materials sector on growing fears of a slowdown in China, with data today not helping matters.
In US corporate news, Electronics giant Sony (NYSE:SNE) Tuesday posted a record $6.4 billion loss for its 2011 fiscal year, which is double earlier forecasts and Sony’s worst loss since the company was founded.
The news comes a day after reports that it planned to cut 10,000 jobs, or 6 percent of its global workforce.
Shares of grocery retailer Supervalu were up more than 10%, despite reporting a fourth quarter loss, as adjusted earnings still beat estimates. Looking ahead to the current year, the supermarket operator said it saw earnings of $1.27 to $1.42 per share on sales of $35 to $35.5 billion.
Analysts polled by Thomson Reuters most recently expected earnings of $1.19 per share on revenue of $35.3 billion.
Best Buy (NYSE:BBY) shares were down more than 4% after the company announced that its CEO Brian Dunn resigned, and it would start a new search to fill the position.
On the economic front, wholesale inventories were higher than expected in February, increasing 0.9%, above the 0.5% rise forecast. Inventories rose 0.4% in January.
European markets finished sharply lower today with shares in France leading the region. The CAC 40 was down 3.08% while Germany's DAX was off 2.49% and Britain's FTSE 100 fell lower by 2.24%.
