TSX closes weakest in over two years; financials slide 1.5 percent

Tue Dec 8, 2015 4:48pm EST
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index on Tuesday saw its weakest close in more than two years as continued pressure on crude oil weighed on sentiment in the resource-linked market.

"What started the day on the wrong foot was the November trade data from China," said Ben Jang, portfolio manager at Nicola Wealth Management, adding that slower economic growth from China is weighing on global markets.

The drop in U.S. crude oil prices below $40 a barrel has been taken as an indication that "global demand is weak," according to Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Oil futures ended lower after plumbing near seven-year lows on fear that global oil producers will pump even more crude in a battle for market share in a saturated market.

The biggest weight on the index were the major banks, which last week all reported a rise in bad loans in the energy sector from a year earlier. Investors worried that this could turn into more writedowns and losses.

Royal Bank of Canada (RY.TO: Quote) fell 1.5 percent to C$74.30, while Toronto-Dominion Bank TD.TO was down 1.7 percent at C$53.15. Insurer Manulife Financial Corp MFC.TO lost 3.5 percent to C$21.07.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 120.38 points, or 0.92 percent, to 12,922.45, its weakest close since October 2013.

Intra-day, the market hit its weakest level since Aug. 24.   Continued...

 
A man walks past a sign displaying TSX information is seen in Toronto, May 6, 2009.    REUTERS/Mark Blinch