Thursday, 13 August 2015 21:04
TORONTO: Canada’s main stock index fell for a third straight session on Thursday as weaker commodity prices squeezed energy and mining shares but the drop was cushioned by a Chinese central bank assurance that there was no reason for the yuan to fall further.
This week’s devaluation of the Chinese currency had pulled down commodity prices on concern that China would not be able to import as much.
Putting more pressure on the market was retailer Canadian Tire Corp, the only one of the index’s 30 biggest decliners that was not a financial, mining or oil and gas stock. Canadian Tire tumbled 5.0 percent to C$ 124 after it reported a lower-than-expected quarterly profit on slower sales growth.
“If we had to make a guesstimate, we’re still in a narrow range going forward,” said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets.
“It’s probably going to be challenging over the next few months. We’re watching volatility very carefully.”
Financial stocks, which make up roughly a third of the index, weighed heavily, hurt in part by Canada’s low interest-rate environment and by banks’ ties to the battered oil and gas industry, Mokhtari said.
Toronto-Dominion Bank fell 0.7 percent to C$ 52.23. The overall financials group, which also includes life insurance companies, retreated 0.4 percent.
At 10:56 a.m. EDT (1456 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was off 34.8 points, or 0.24 percent, at 14,304.73.
Only four of the TSX’s 10 main groups were down, but they included financials, energy and materials. The three sectors combined make up roughly two thirds of the index’s weight.
Energy stocks stumbled 2.1 percent as crude prices took another beating. U.S. crude lost 2.5 percent to $ 42.22 a barrel, while Brent crude was down 1.2 percent to $ 49.07.
In the group, Canadian Natural Resources declined 2.8 percent to C$ 31.06, while Suncor Energy Inc fell 1.0 percent to C$ 37.13.
The materials sector, home to miners, gave up 1.5 percent, with gold miners leading the losses. Goldcorp Inc sank 3.2 percent to C$ 19.15.
Gold futures fell 0.8 percent to $ 1,114.40 an ounce, snapping five sessions of gains as the U.S. dollar firmed on U.S. economic data and easing concern over China’s yuan.
Declining issues outnumbered advancing ones by 160 to 81, for a nearly 2-to-1 ratio on the downside.
The index was posting five new 52-week highs and 12 new lows.
