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Roundup: Canadian stock market tumbles as strong U.S. job data triggers rate hike fears

Xinhua, March 7, 2015 Adjust font size:

Canada's main stock market tumbled on Friday as the strong U.S. labor market data triggered investors' concern about a potential interest rates hike by the U. S. central bank.

Toronto Stock Exchange's benchmark S&P/TSX Composite Index dropped 150.61 points or one percent to 14,952.50 points, with seven of the eight major sectors in the red.

The U.S. economy added 295,000 jobs in February, well above market expectations, and the unemployment rate edged down to 5.5 percent, the U.S. Labor Department said in a report Friday.

"For the second month in a row, U.S. employment handily topped expectations and brushed aside mounting concerns over surprising softness in many other indicators," said Douglas Porter, chief economist from Bank of Montreal.

Traders were in fears of a lift in U.S. central bank' key interest rates in near future.

The metals and mining sector led the TSX decline by 1.81 percent over gold shares selloff as the strong U.S. dollar, which was pushed up by the solid U.S. job data, hammered down the global gold price. The April gold bullion fell 31.9 U.S. dollars to 1,164. 3 dollars per ounce on the Comex division of the New York Mercantile Exchange.

The S&P/TSX Global Gold Index nosedived 6.46 percent on Friday when gold producer giant Goldcorp Inc. dived 7.19 percent to 24.02 Canadian dollars (about 19.05 U.S. dollars), and Barrick Gold Corp. slumped 6.37 percent to 14.26 Canadian dollars.

Energy, another resource group, lost 1.27 percent over weak oil prices. Canadian Natural Resources Ltd. shrank 3.03 percent to 37. 47 Canadian dollars per share, following a solid jump of 5.06 percent, strengthened by a much better than expected profit report on Thursday.

But Enbridge, Canada's biggest pipeline operator of crude oil and natural gas, rose 1.69 percent to 59.05 Canadian dollars after it said Thursday after the closing bell that it plans to optimize a previously announced expansion of its Regional Oil Sands System, with the aim of maintaining attractive returns on the capital to be invested.

Among other losers, industrials plummeted 1.12 percent as Canadian Pacific Railway Ltd. gave back 2.23 percent to 237 Canadian dollars, and Utilities retreated 1.51 percent when Fortis Inc. dropped 2.84 percent to 38.70 Canadian dollars.

However, financials, the most weighed sector, rebounded 0.19 percent from the slump in the last three sessions. Manulife Financial Corp. jumped 2.16 percent to 21.73 Canadian dollars and Toronto-Dominion Bank added 0.33 percent to 54.30 Canadian dollars.

On the economic front, Statistics Canada reported that Canada's exports declined 2.8 percent in January on lower crude oil prices. As a result, Canada's merchandise trade deficit widened from 1.2 billion Canadian dollars in December to 2.5 billion Canadian dollars in January, the largest since the record 2.9-billion- Canadian dollar deficit in July 2012.

As for the currency, the Canadian dollar on Friday moved lower to 0.7930 U.S. dollar from 0.7996 U.S. dollar Thursday, as the greenback strengthened. Endite