TSX tumbles 250 points as resources slump

Written By Unknown on Senin, 15 April 2013 | 22.39

Gold and oil veered sharply lower Monday following data that showed much weaker than expected economic growth in China, sending the benchmark index of the Toronto Stock Exchange to a loss of more than 250 points.

By 11:20 a.m. ET, the S&P/TSX composite index had slumped 255 points to 12,082. The materials group, which includes gold stocks, plunged 7.5 per cent.

Gold futures tumbled $138 US an ounce to $1,363. That's a two-year low for the precious metal and the biggest one-day drop since 1980.

Gold miners suffered huge declines. Shares of Barrick Gold plunged almost 10 per cent, or $2.12, to $20.82. It was the most actively traded stock on the TSX. Kinross Gold fell 71 cents to $5.70.

Silver plunged more than 11 per cent, down $3.03 to $23.30 an ounce.

China announced Monday that its economy grew by 7.7 per cent in the first quarter. While that's much better than most countries, it surprised analysts who'd expected China's GDP would pick up steam to eight per cent.

"The GDP figure will no doubt prompt 2013 growth forecasts for China to be trimmed over the coming days," said BMO Capital Markets senior economist Benjamin Reitzes.

China is the biggest driver of commodity prices, so any sign of weakness leads to quick selloffs in the resource sector.

Copper and aluminum prices also hit new year lows Monday. Teck Resources, a major producer of copper, plunged $2.86 to $25.28.

Crude oil futures also slumped on the China news, falling $2.95 to $88.34 a barrel. The TSX energy group tumbled 2.7 per cent.

The Dow Jones industrial average fell 88 points to 14,776. The S&P 500 fell 12 points to 1,577.

The Canadian dollar, which often moves in line with commodity prices, slid 0.60 cents to 98.04 cents US.

With files from the Canadian Press

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