Friday, 11 September 2015 20:11
OTTAWA: Canada’s main stock index fell on Friday as energy shares tumbled alongside the price of oil after Goldman Sachs cut its crude forecast. Investors were also looking ahead to next week’s meeting of the US Federal Reserve, which could prove pivotal if the central bank decides to raise interest rates for the first time in nearly a decade.
The uncertainty over whether the Fed will lift rates next week or wait until later in the year could mean greater volatility in global markets, including Canada.
“The decision that they make next week will be one of the most closely watched decisions in the last couple of years,” said Bryden Teich, associate portfolio manager at Avenue Investment Management in Toronto.
“It just adds a little bit of uncertainty for the next week, and I think most people are waiting for cues on what they’re going to do to see how things shake out from there.”
But the main driver of Friday’s trading was the 3.5 percent decline in the price of oil after Goldman cut its 2016 crude forecast due to oversupply and concerns about China’s economy. US crude traded at $ 44.31 a barrel, off $ 1.62.
Oil is a major export for Canada and the slump in prices has hit the economy, putting it into a mild recession in the first half of the year. Energy shares make up about 30 percent of the TSX.
At 10:21 a.m. EDT (1421 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 94.98 points, or 0.7 percent, at 13,474.91. Seven of the TSX’s 10 main groups were lower.
Oil companies were among the biggest drags on the index, with Suncor Energy inc down 2 percent at C$ 34.32 and Canadian Natural Resources Ltd declining 3.3 percent to C$ 26.65.
The overall energy group retreated 2.7 percent, while stocks of other natural resources companies also fell, including Goldcorp, down 1.9 percent at C$ 16.47.
Shares of Dollarama Inc gave up early gains to trade slightly lower after the discount retailer posted a better-than-expected increase in quarterly profit and sales.
A number of firms raised their price target for Dollarama on Friday morning. Dollarama edged down 0.1 percent at C$ 85.46.
