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TSX declines on oil oversupply worries; Fed eyed

TSX declines on oil oversupply worries; Fed eyedTORONTO: Canada’s main stock index dropped on Tuesday as fresh concerns about oversupply hit oil prices and shares of energy producers, while the market remained focused on the outcome of a crucial Federal Reserve policy meeting.

Rising inventories renewed worries about a global supply glut, sending the price of U.S. crude to a six-year low.

Investors hope that the two-day Federal Open Market Committee meeting that got underway on Tuesday would help shed light on when the U.S. central bank could raise interest rates.

“We’re going to start to see the Fed moving toward guidance that would direct the market to expect a summer rate hike,” said Andrew Pyle, senior wealth advisor and portfolio manager at ScotiaMcLeod.

“I think it will be ‘market neutral’,” he added of the Fed statement due to be issued on Wednesday. “We’d have to see some very hawkish language in the statement to cause not only further instability in the bond markets but further profit-taking in stocks.”

The Toronto Stock Exchange’s S&P/TSX composite index was down 128.93 points, or 0.87 percent, at 14,733.83. Nine of the 10 main sectors on the index were in the red.

Financials, the index’s most heavily weighted sector, fell 1.1 percent. Royal Bank of Canada lost 1.2 percent to C$ 75.42, and Bank of Nova Scotia slipped 1.4 percent to C$ 62.86.

Shares of energy producers were down 1.1 percent. Suncor Energy Inc gave back 1.6 percent to C$ 34.65, and Canadian Natural Resources Ltd was down 2.3 percent at C$ 36.26.

Bombardier Inc’s stock jumped 2.8 percent, to C$ 2.56, on news that a new privately held Malaysian airline intends to buy 20 Bombardier CS100 aircraft for $ 1.5 billion.

Copyright Reuters, 2015

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