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The TMX Broadcast Centre in Toronto (Frank Gunn/THE CANADIAN PRESS)
The TMX Broadcast Centre in Toronto (Frank Gunn/THE CANADIAN PRESS)

At the open: TSX lower as IMF cuts growth forecasts Add to ...

The Toronto stock market was lower Tuesday amid another round of worries about a slowing global economy.

The S&P/TSX composite index fell 69.51 points to 12,349.48 while the TSX Venture Exchange slipped 5.76 points to 1,339.22.

The Canadian dollar was up 0.31 of a cent to 102.47 cents US amid rising commodity prices and positive housing sector news.

U.S. markets added to minor losses racked up Monday as traders also looked to the start of the third-quarter earnings season with resource giant Alcoa Inc. set to report after the close. The Dow Jones industrials was down 21.49 points to 13,562.16.

The Nasdaq composite index declined 19.47 points to 3,092.88, while the S&P 500 index slipped 3.08 points to 1,452.8.

Traders were cautious amid a report from the International Monetary Fund that downside economic risks have increased and are considerable.

It said Tuesday in a quarterly update of its World Economic Outlook that the global economy will expand 3.3 per cent this year, down from the estimate of 3.5 per cent growth it issued in July. Its forecast for growth in 2013 is 3.6 per cent, down from 3.9 per cent three months ago and 4.1 per cent in April.

The IMF added that the global economic malaise is spreading to more dynamic emerging economies such as China.

It said that China’s economy will likely expand 7.8 per cent this year, down from July’s eight per cent forecast.

Commodity prices were stable after registering losses Monday in the wake of a pessimistic outlook from the World Bank. The organization cut its forecasts for economic expansion in East Asia, saying it expected the region to grow by 7.2 per cent in 2012, down from a projection of 7.6 per cent in May.

On Tuesday, the November crude contract on the New York Mercantile Exchange rose 93 cents to US$90.26 a barrel.

Oil had slipped the previous three sessions but found support Tuesday, partly on supply concerns linked to the Syrian conflict.

A report from Commerzbank in Frankfurt said there are supply risks since Turkey might become involved in the conflict.

The energy sector was down 0.4 per cent and Cenovus Energy (TSX:CVE) gave back 27 cents to C$34.15.

The gold sector lost 0.85 per cent as December bullion dipped 70 cents to US$1,775 an ounce. Barrick Gold Corp. (TSX:ABX) faded 67 cents to C$40.46.

December copper clawed back some of Monday’s six cent loss, rising one cent to US$3.73 a pound. The base metals sector was little changed but Teck Resources (TSX:TCK.B) ran ahead 44 cents to C$30.54.

Research In Motion (TSX:RIM) helped take the tech sector down 0.85 per cent after research analysts at Jefferies Group reaffirmed its underperform rating for the BlackBerry maker. RIM shares fell 39 cents to $7.67.

Meanwhile, Alcoa is expected to post third-quarter earnings at break-even on a per share basis, down from 14 cents a share a year ago. The company is seen as an economic bellwether as its products are used in a wide variety of industries, from auto makers to appliance manufacturers.

On the economic front, fresh data showed continued strength in the Canadian housing sector. Canada Mortgage and Housing Corp. said housing starts came in at an annualized rate of 220,000 in September, much stronger than the 205,000 that economists had expected.

European markets were mixed as London’s FTSE 100 index slipped 0.14 per cent, Frankfurt’s DAX added 0.04 per cent and the Paris CAC 40 gained 0.37 per cent.

In Asia, Hong Kong’s Hang Seng rose 0.5 per cent while South Korea’s Kospi fell 0.1 per cent, Australia’s S&P/ASX 200 gained 0.5 per cent and Japan’s Nikkei 225 index tumbled 1.1 per cent.

Chinese stocks rose after the country’s central bank injected 265 billion yuan (US$42 billion) into the money supply in what analysts said was the second-biggest such move to date.

In addition, China’s sovereign wealth fund said it would buy millions of shares in Industrial & Commercial Bank of China, the world’s biggest bank by market capitalization.

The Shanghai Composite Index climbed two per cent.

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