Tuesday, 28 July 2015 02:19
TORONTO: Canada’s main stock index fell on Monday, in a broad rout that tracked global equities, which fell on the heels of a more than 8 percent plunge in Chinese stocks.
The declines were led by the heavily weighted energy and financial sectors, which were down 1.7 percent and 1.3 percent, respectively. “The energy sector is just so bad, it looks like the impact of lower energy prices the hit to production and investment seems to be quite significant,” said John Johnston, chief strategist at Davis-Rea.
“The manufacturing sector globally is still slowing and that’s really crushing commodities. That’s weighing on a whole range of stock markets.” Among oil and gas companies, Enbridge Inc slid 1.62 percent to C$ 54.52, while Suncor Energy Inc retreated 1.27 percent to C$ 32.66.
Toronto Dominion Bank led the fall in financials with a 1.33 percent slide to C$ 51.17, while Royal Bank of Canada declined 1.2 percent to C$ 73.67.
At 11:23 a.m. EDT (1523 GMT), the Toronto Stock Exchange’s S&P/TSX composite index fell 141.2 points, or 1 percent, to 14,045.04.
All 10 of the index’s main sectors were mired in the red, with declining shares outnumbered advancing ones on the TSX by 214 to 34, for a 6.29-to-1 ratio on the downside.
The index was posting no new 52-week highs and 49 new lows. The materials group, home to mining firms and another major index mover, retreated 1.3 percent.
Chinese stocks saw its biggest selloff in eight years, which stoked concerns over the global impact of slowing growth in the world’s second-largest economy.
A dramatic 8.5 percent fall in Shanghai rattled markets around the world and sent commodity prices falling.
“I’m somewhat kind of pessimistic on China. I certainly don’t see a crash imminent, but the economy is slower than I would’ve thought,” said Johnston, who expressed concerned that a global recession could potentially be unfolding.
US crude prices were down 1.5 percent to $ 47.42 a barrel, while Brent crude lost 2.0 percent to $ 53.52. Meanwhile, gold futures rose 0.9 percent to $ 1,095.4 an ounce, as prices edged closer to 5-1/2 year lows.
Copper prices, which hit six-year lows, tumbled 1.1 percent to $ 5,206.5 a tonne.
Restaurant Brand International, formed out of Burger King’s takeover of Canadian coffee and doughnut chain Tim Hortons, was among the few gainers.
Shares rose 3.5 percent to C$ 54.03, after it reported a better-than-expected quarterly profit due to strong sales.
