Canadian stocks hit by Cyprus bailout worries

The Canadian stock market fell on Monday as investors were concerned about a controversial bank deposits levy that eurozone country Cyprus plans to impose to help pay for its bailout. The S&P/TSX Composite Index dropped 48.27 points, or 0.38 percent, to 12,781.76, while the S&P/TSX Venture Composite Index decreased 5.37 points, or 0.48 percent, to 1,111.78. The Canadian stocks fell on Monday after a bailout agreement reached over the weekend in Cyprus raised fears about a possible financial contagion in other parts of Europe. Eurozone leaders unveiled a 10-billion-euro bailout plan late Sunday to help Cyprus avoid a debt default, but at the same time required a 6.75 or 9.9-percent levy on deposits in the banks of the Mediterranean island nation. Cypriots rushed to the banks as their government tried to win parliament support for this plan. Although the eurozone leaders have stressed that Cyprus is a unique case, investors still worry that depositors in other financially-weak European nations may face similar bailout plans in the future. Cyprus' parliament has delayed a vote on the plan till Tuesday to allow more time for negotiations. Bank stocks slumped around the globe. The financial sector on the Canadian market dropped 0.5 percent. Bank of Nova Scotia fell 0.8 percent to 59.84 Canadian dollars per share, and Toronto Dominion Bank was down 0.6 percent at 84.53 Canadian dollars. Energy stocks also weighed on the Canadian market heavily, with Suncor Energy down 1.9 percent to 31.08 Canadian dollars per share and Encana Corp off 1.5 percent at 20.41 Canadian dollars. Gold stocks were the sole climbers as April bullion price added 11.70 U.S. dollars to 1,604.30 dollars an ounce thanks to gold's rising safe-haven appeal. Barrick Gold rose 1.3 percent to 29.59 Canadian dollars and Goldcrop gained 0.4 percent to 33.28 Canadian dollars. On the currency front, the Canadian dollar moved down to 0.9788 U.S. dollars at 5 p.m. local time (2100 GMT) on Monday, compared with 0.9808 last Friday.