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Traders work on the floor of the New York Stock Exchange March 3, 2014. (BRENDAN MCDERMID/REUTERS)
Traders work on the floor of the New York Stock Exchange March 3, 2014. (BRENDAN MCDERMID/REUTERS)

At the open: Markets slide on Chinese growth worries Add to ...

The resource sector inflicted further losses on the Toronto stock market Wednesday as commodities continued to retreat amid worries about Chinese growth.

The S&P/TSX composite index dropped 48.93 points to 14,218.3.

Another day of sharp losses for oil and copper helped send the commodity-sensitive Canadian dollar down 0.28 of a cent to 89.79 cents (U.S.).

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U.S. indexes also declined as the Dow Jones industrials lost 84.41 points to 16,266.84, the Nasdaq was down 26.59 points to 4,280.6 and the S&P 500 index dropped 11.33 points to 1,856.30.

The catalyst for the latest round of concerns about growth in the world’s second-biggest economy was data released over the weekend showing a drop of 18 per cent in Chinese exports during February. That data had followed news last week that Chinese authorities had given the go ahead for the country’s first credit default.

Copper, viewed as an economic barometer as it is used in so many applications, has tumbled in recent days to the lowest level since mid-2010, having fallen 8.3 per cent over the last three sessions. The TSX base metals sector was down 0.8 per cent as the May copper contract on the New York Mercantile Exchange was down a penny to $2.94 (U.S.) a pound.

“China growth fears dominate sentiment and continue to fuel a sell-off in copper and commodity linked currencies,” said a commentary from Barclays Research.

“Fears following the first onshore credit default have led to speculation that further defaults may unlock copper from financing deals and fuel further selling.”

The energy sector shed 0.82 per cent as oil prices have also headed steadily lower, and the April contract in New York was down another $1.74 to $98.29 after losing about $2.50 since the beginning of the week.

The TSX telecom and tech sectors also added downward pressure to the TSX.

TSX losses were limited by a two per cent jump in the gold sector as worries about China, along with Ukraine tensions, pushed bullion prices higher with the May contract ahead $18.60 to a 5 1/2 month high of $1,365.30 an ounce.

Traders have kept an eye on simmering tensions between Russia and Ukraine.

The U.S. Senate has prepared legislation that would impose economic penalties on Russian officials complicit in Ukrainian corruption or anyone responsible for Moscow’s military takeover of Ukraine’s Crimean peninsula.

European bourses were deep in the red as London’s FTSE 100 index lost 1.05 per cent. Frankfurt’s DAX shed 1.3 per cent and the Paris CAC 40 fell 1.6 per cent.

Earlier in Asia, Hong Kong’s Hang Seng closed down 1.7 per cent while China’s Shanghai Composite dropped 0.2 per cent. Japan’s Nikkei 225 slid 2.6 per cent after the Bank of Japan’s decision not to expand its already lavish monetary stimulus following a two-day policy meeting that ended Tuesday.

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