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BREAKING:

$535B CANADA BUDGET PROJECTS $39.8B DEFICIT, AIMS TO RESTORE ECONOMIC FAIRNESS

It seeks to ease the housing and affordability crisis by making older, wealthier Canadians pay more

TSX drops as U.S. jobs data sparks rate hike fears

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By John Tilak

TORONTO (Reuters) - Canada's main stock index dropped to its lowest in more than a month on Friday as a bullish U.S. jobs report raised fears that the Federal Reserve could increase interest rates sooner than expected.

The upbeat data, coupled with a stronger U.S. dollar, helped send the bullion price tumbling. Shares of gold miners dived.

The U.S. data showed a pickup in the pace of employment growth in February and a drop in the jobless rate to a multi-year low.

“We’re seeing concerns about the timing of the inevitable rate hike of the Fed,” said Elvis Picardo, strategist and vice president of research at Global Securities.

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“Our fundamental thesis that the TSX will have a down year still stands,” he added.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed down 150.61 points, or 1 percent, at 14,952.50. Nine of the 10 main sectors on the index were in the red.

The financial sector, which has been hit by worries about a slowing Canadian economy, climbed 0.2 percent after declines in the previous three sessions. Toronto-Dominion Bank (Toronto:TD.TO - News) added 0.3 percent to C$54.30, and Royal Bank of Canada (Toronto:RY.TO - News) edged higher to C$77.16.

The gold-mining sector shed 6.4 percent, with the price of safe-haven bullion dropping 2.6 percent. Goldcorp Inc (Toronto:G.TO - News) fell 7.2 percent to C$24.02, and Barrick Gold Corp (Toronto:ABX.TO - News) was down 6.4 percent at C$14.26.

(Editing by Peter Galloway and David Gregorio)