Energy drags TSX lower ahead of OPEC, pipeline decisions

Tue Nov 29, 2016 4:35pm EST
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell to a new one-week low on Tuesday as energy stocks slumped due to major oil exporters' struggle to agree on terms of a planned production cut, while Bank of Nova Scotia gained after a solid earnings report.

U.S. crude prices settled $1.85 lower at $45.23 a barrel, as Iran and Iraq resisted pressure from Saudi Arabia to curtail their output, complicating the efforts of the Organization of the Petroleum Exporting Countries to reach a global output-limiting deal when it meets on Wednesday. [O/R]

The most influential weights on the index included Suncor Energy Inc, which fell 2.2 percent to C$40.35, and Canadian Natural Resources Ltd, down 2.3 percent to C$41.67. The energy group retreated 2.4 percent overall.

The pullback in energy stocks is a "buying opportunity," said Philip Petursson, chief investment strategist at Manulife Asset Management.

"We have seen a real shift in mindset out of OPEC ... that something needs to be done to support oil prices and if it (a deal) is not done at this meeting then it will be done the next time they get together."

Energy investors are also awaiting Canadian government decisions on two major Enbridge Inc pipeline projects that are expected on Tuesday. Shares in the company fell 1.3 percent to C$56.69.

The Toronto Stock Exchange's S&P/TSX composite index closed down 15.55 points, or 0.1 percent, at 14,999.81, its lowest since Nov. 21.

Just three of the index's 10 main groups ended lower.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. Canada's main stock index was little changed on Monday as weakness in financial and energy shares offset gains in the materials sector.   REUTERS/Mark Blinch