TSX closes lower on Greece, China worries - Action News
Home WebMail Wednesday, November 13, 2024, 06:31 AM | Calgary | -0.3°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Business

TSX closes lower on Greece, China worries

North American stock markets closed lower Friday on concerns about a messy default by Greece and worries about the pace of growth in China.
Investors focused on unrest in Greece, where anti-austerity protesters in Athens Friday threw stones and firebombs at riot police, who responded with tear gas. (Aris Messinis/AFP/Getty)

North American stock markets closed lower Friday on concerns about a messy default by Greece and worries about the pace of growth in China.

The S&P/TSX composite index was down 108.52 points, or 0.87 per cent, at12,389.42.

The Canadian dollar was down sharply as traders avoided risky investments and bought into the safe haven status of U.S. Treasuries. The loonie fell 0.72 of a cent99.72 cents US.

In New York, the Dow Jones industrial average fell 89.23 points, or 0.69 per cent,to 12,801.23, the Nasdaq composite index declined 23.35 points, or 0.80 per cent,to 2,903.88 and the S&P 500 index slipped 9.31 points, or 0.69 per cent,to 1,342.64.

Traders ignoreda report from Statistics Canada that the country's trade surplus with the rest of the world was upto $2.7 billion in December from $1.2 billion in November as merchandise exports rose 4.5 per cent and imports edged up 0.8 per cent.

Instead they focused on the news out of Greece, where six members of the 48-strong cabinet have now resigned in protest againstEuropean Union demands for more austerity in exchange for a vital bailout.

The resignations came as thousands of people took to the streetsin Athens as unions launcheda two-day general strikeagainst planned spending cuts.

The moves add pressure on Prime Minister Lucas Papademos' government, which has vowed to push through the unpopular reforms to get the rescue loans and avoid a default.

But analysts still thought an agreement on a bailout will be arrived at because "the reality is if you have a social network that you can't afford now, then you will have a social network that you can't afford whether you go bankrupt or not," observed Gareth Watson, vice president Investment Management and Research at Richardson GMP Ltd.

"Even if you have a default, and even if you get out of the euro and bring back the drachma ... if you thought things were tough before, wait until you see prices go up after your currency depreciates about 60 per cent when the drachma starts trading again."

China's imports fall more than expected

Investors also responded to disappointing economic data from China, a major buyer of commodities.

The Chinese government announced its trade balance suffered its biggest decline in January since the 2008 financial crisis in a new sign of weak global demand and a slowing domestic economy.

Exports fell 0.5 per cent from a year earlier to $149.9 billion US, while imports were down 15 per cent at $122.7 billion.

The import decline was sharper than expected, suggesting that even the world's second-largest economy is slowing markedly.

March copper dropped 12 cents to $3.86 US a pound and the March crude contract closed down 57 cents at $99.87 US a barrel.

A stronger American dollar also contributed to April gold dropping $15.90 to $1,725.30 US an ounce.

European markets closed down with London's FTSE 100 index off 0.72 per cent, Frankfurt's DAX down 1.40 per cent and the Paris CAC 40 lower by 1.51 per cent.

With files from The Canadian Press and The Associated Press