TORONTO (Reuters) - Canada’s main stock index dropped to its lowest in nearly 3 weeks on Tuesday as oil prices plunged on renewed concerns about a global supply glut, helping push down shares of energy producers.
The release of sluggish U.S. economic data, with new orders for factory goods dropping for a fourth straight month in November, contributed further to the bearish mood.
Oil prices touched a 5-1/2-year low and have slid almost 10 percent in the last two sessions. They are down about 55 percent since June. [O/R] Shares of energy companies have lost more than a third of their value during this time.
Hit by the energy-sector weakness, the benchmark Canadian index extended losses after recording its biggest single-day drop in about 20 months on Monday.
“We’re looking ahead to a very volatile 2015,” said Marcus Xu, portfolio manager at M.Y. Capital Management Corp in Vancouver. “I’m not going to try to pretend to know where the bottom is.”
“I don’t recommend that investors in Canada stay too heavily invested in the commodity sectors,” he said, adding that they should look at the consumer and financial sectors instead.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 145.93 points, or 1.01 percent, at 14,246.77. Nine of the 10 main sectors on the index were in the red.
Financials, the index’s most heavily weighted sector, gave back 1.6 percent. Toronto Dominion Bank (TD.TO) declined 1.6 percent to C$53.06, and Bank of Nova Scotia (BNS.TO) was down 1.2 percent at C$63.49.
The negative sentiment for equities drove the bullion price higher, sending shares of gold miners up 6 percent. Goldcorp Inc (G.TO) shot up 8.1 percent to C$24, and Barrick Gold Corp (ABX.TO) added 3.9 percent to C$13.31.
Editing by W Simon and Meredith Mazzilli