Stocks down in early trading, miners fall back amid disappointing read on Chinese manufacturing

Canadian Press, The Canadian Press
0 Comments| March 24, 2014

TORONTO _ The Toronto stock market lost early momentum mid-morning Monday amid data showing continued contraction of China's manufacturing sector.

The S&P/TSX composite index lost 25.37 points to 13,310.39, with the market also held back by gold stocks which gave up further ground as bullion prices continued to decline.

The Canadian dollar was off 0.01 of a cent to 89.2 cents US.

U.S. indexes were also lacklustre after the preliminary version of HSBC's purchasing managers' index for China dropped to 48.1 in March from February's 48.5. It was the lowest reading since July 2013 and was below consensus expectations of a modest rise.

The Dow Jones industrials gave back 11.71 points to 16,291.06, the Nasdaq fell 44.78 points to 4,232.01 while the S&P 500 index was 8.08 points lower to 1,858.44.

The worse-than-expected Chinese data suggested that the slowdown in the world's second biggest economy is deepening.

But markets had earlier advanced on hopes that the data meant the Chinese government would take action to ensure it meets its growth target of about 7.5 per cent.

Analysts looked to Beijing to introduce a series of pro-growth measures focusing on accelerating fiscal spending on infrastructure and reforms.

The gold sector was the leading decliner, down 2.1 per cent as April bullion shed $18.40 to US$1,317.60 an ounce. Gold prices initially spiked in the wake of Russia's invasion of Ukraine earlier this month. But they backed off as any threat of military retaliation quickly evaporated while sanctions have been aimed at specific individuals, not the main Russian economy.

The metals and mining sector gave up early gains to move down 0.7 per cent while May copper turned unchanged at US$2.95 a pound. Worries about China have pushed the sector down almost six per cent this month, making that group the leading loser, while copper has fallen more than 7.5 per cent.


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