TORONTO: Toronto's main stock index skidded to near a seven-week low on Tuesday on fears the global growth outlook is darkening and Greece may not be able to complete a major debt restructuring deal.
The resource-heavy index joined global markets in a sharp retreat on the lingering impact of gloomy euro-zone economic data on Monday and of China's move to lower its economic growth forecasts.
The index's big materials and energy sectors fell by 3.2 percent and 3.5 percent respectively, as commodity prices slid on concerns about the demand outlook.
Leading the TSX lower was Suncor Energy, which sank 5.2 percent to C$33.00. Fellow oil company Canadian Natural Resources tumbled 2.2 percent to C$34.83.
On the mining side, Goldcorp dropped 2.8 percent to C$46.30 and First Quantum slid 9.8 percent to C$19.80. Fertilizer company Potash Corp sank 3.3 percent to C$43.24.
The global jitters helped to send the Toronto Stock Exchange's S&P/TSX composite index down 268.02 points, or 2.14 percent, to 12,255.93, its lowest level since Jan. 18.
"The key data point yesterday was China's indication that growth this year will probably slip from 8 percent to 7.5 percent," said Bob Gorman, chief portfolio strategist at TD Waterhouse.
"The emerging markets such as China and India are the sources of incremental demand for resources. As a result, that backs up very quickly into the resource prices and their stocks."
Gorman said the strength in the US dollar also contributed to weaker commodity prices. A stronger greenback makes commodities priced in US dollars more expensive for holders of other currencies.
Data on Tuesday also showed Brazil's gross domestic product expanded by a meager 2.7 percent in 2011, adding to concerns after China cut its growth outlook. Expected growth in emerging markets has been a major impetus for equity gains.
Fears were also intensifying about whether Greece will be able to complete a private-sector debt swap by late Thursday so that it can receive a 130 billion euro bailout and meet bond repayments due by March 20, which would allow it to avoid default.
Those concerns helped to push European shares to a one-week low and the euro also fell.
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