By Cameron French
TORONTO (Reuters) - Canada's main stock index fell more than 1 percent on Friday, as weak U.S. economic data dulled hopes for the Canada's export sector, while a sharp drop in gold prices pulled mining stocks to multi-year lows.
The mining-heavy TSX materials sector dropped 4.21 percent to its lowest level since 2009, fueled by a 4 percent drop in gold prices and sliding copper, while weak oil prices yanked energy stocks down by 1.95 percent.
Mining heavyweight Barrick Gold
A stronger U.S. dollar weighed on the metal, as did reports that Cyprus was raising the cost of its bailout package and could sell bullion to raise funds.
"That has caused concern, and of course the technical breakdown on gold (falling below $1,500) has hurt even the staunchest bulls around," said John Ing, president of Maison Placements in Toronto.
The TSX index's large weighting of gold miners has been an weight on the broader index this year, and key to its sharp underperformance against comparable U.S. indices.
All told, the S&P/TSX composite index <.gsptse> dropped 143.78 points, or 1.15 percent, to finish at 12,337.59.
For the week, the index ended in positive territory, up 0.04 percent, as it rallied sharply on Tuesday following a similar resource-driven selloff last week.
Much of the recent volatility has been due to the heavily-weighted energy sector, as crude oil prices have been buffeted by weak economic news.
On Friday, the subgroup fell 1.95 percent as weak U.S. retail sales and consumer sentiment data pulled helped pull oil prices to their lowest levels since last July and also raised concerns about the health of Canada's largest export market.
Also leading the decline were Husky Energy
The TSX is now in negative territory for the year and looks increasingly weak next to rallying U.S. indices such as the S&P 500 <.spx> and Dow Jones Industrial Index <.dji>, both of which were down slightly on Friday.
But with the weakness in the Toronto market largely resource-focused, the market should eventually pull out of its recent slump, said Gavin Graham, chief strategy officer at Integris Pension Management.
"If you believe that the strength of other markets in the U.S. and Japan is justified, then Canada should play catch-up," he said.
Bucking the negative trend was Dollarama Inc
(Editing by Grant McCool)