Oil's drop, Fed fears yank TSX to one-week low

Fri Jul 26, 2013 5:15pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index hit a one-week low on Friday with falling oil prices fueling a decline in shares of energy producers and a Federal Reserve meeting next week reviving worries about the fate of the U.S. central bank's stimulus program.

The Toronto market fell for a fourth consecutive session and declined on the week after four straight weeks of gains.

The price of oil slipped as more concerns over waning Chinese demand emerged after the world's second-largest oil consumer ordered companies across 19 industries to close outdated capacity by the end of September.

The return of Fed fears and choppy trading in bullion ensured a volatile session for gold miners. They turned higher after back-and-forth trading all day.

Focus was on the Fed's policy meeting next week, with the market again uneasy that the Fed might dial back its stimulus program sharply.

"Given Bernanke has been toning it down, I suspect we'll see a pretty dovish statement," said Lorne Steinberg, president of Lorne Steinberg Wealth Management.

"I think the market will be happy with the Fed statement, which to me is only temporarily postponing the inevitable (pullback of stimulus)."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 21.24 points, or 0.17 percent, at 12,647.90, after touching 12,614.56, its lowest point since July 18.   Continued...

 
A sign shows TSX information in Toronto September 15, 2008. REUTERS/Mark Blinch