TORONTO (Reuters) - Canada’s main stock index fell sharply on Wednesday, pushed lower by a slump in energy stocks on cheaper oil and losses for miners as gold and copper prices also declined.
Oil prices tumbled more than 4 percent and Canada’s energy sector followed it down 3.5 percent. The group has shed one-fifth of its value so far this year.
“The lessons that we learned this year is that commodities can be awfully nasty,” said Barry Schwartz, a portfolio manager at Baskin Financial Services.
Commodities prices were pressured by a mix of demand worries, supply glut and by U.S. dollar strength after Federal Reserve Chair Janet Yellen signaled a readiness to hike interest rates and U.S. data indicated a strengthening labor market.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 172.24 points, or 1.26 percent, at 13,463.82. All 10 main groups fell.
The financial group, which accounts for 38 percent of the index’s weight, fell 0.3 percent as more of the country’s major banks reporting quarterly earnings
Royal Bank of Canada (RY.TO) was flat at C$76.87 after its profit beat estimates as gains in retail banking and capital markets more than offset bad loans in the oil and gas sector.
National Bank of Canada (NA.TO) slipped 0.5 percent to C$43.91 after reporting higher profit and an increased dividend.
Bank of Nova Scotia shares (BNS.TO) fell 1.6 percent to C$59.87 a day after the company reported higher quarterly profit but weakness in its capital markets business and an increase in bad energy loans.
“I‘m very happy with the Canadian banks and their earnings,” Baskin’s Schwartz said. “I think they’re fabulous results in a really tough environment.”
The Bank of Canada held interest rates steady but warned of rising vulnerabilities in the household sector, where debt has climbed as consumers take advantage of low borrowing costs.
Reporting by Alastair Sharp; Editing by James Dalgleish