TSX posts biggest decline since February on growth concerns

By Fergal Smith

(Reuters) -Canada's main stock index fell by the most in six months on Thursday as investors worried that weaker economic data globally could be a sign that the Federal Reserve has waited too long to begin its interest rate cutting campaign.

The S&P/TSX composite index ended down 387.60 points, or 1.7%, at 22,723.21, its biggest daily decline since Feb. 13.

On Wednesday, the index posted a record closing high as the Fed signaled it could begin cutting interest rates in September

"We are seeing a big reversal and I think that is tied to growth concerns," said Angelo Kourkafas, a senior investment strategist at Edward Jones.

Wall Street also ended sharply lower as manufacturers across the United States, Europe and Asia turned in a weak performance last month, raising the risk of an underpowered global economic recovery. Activity in Canada's factory sector was also downbeat.

"Today the main question is if the Fed is behind the curve. Or basically, should they have cut rates already, as there are some downside risks emerging, and I think the answer to this question will possibly be given tomorrow by the jobs report that is coming out," Kourkafas said.

The U.S. non-farm payrolls report, due on Friday, is expected to show the economy adding 175,000 jobs in July, which would be fewer than in June.

The Toronto market's technology sector fell 3.4% and heavily weighted financials ended 1.6% lower.

Energy was down nearly 3% as the price of oil settled 2.1% lower at $76.31 a barrel. Gold and copper prices also fell, while the materials group, which includes metal miners and fertilizer companies, ended nearly 2% lower.

Shares of First Majestic Silver Corp tumbled 13.3% after the company reported second-quarter results.

Just two of ten major sectors notched gains, including real estate, which added 0.6%.

(Reporting by Fergal Smith in Toronto and by Shubham Batra in Bengaluru; Editing by Shreya Biswas and Alistair Bell)