TSX falls as Moody's downgrades banks, Aimia plunges

Thu May 11, 2017 5:12pm EDT
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Thursday, as a Moody's downgrade of Canadian banks struck financials, and frequent-flyer points operator Aimia Inc AIM.TO plunged on news its program would be dropped by the country's largest airline.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE posted a record high in February but has since pulled back 2.3 percent, pressured by depressed oil prices, a more uncertain outlook for Canada's exports to the United States and investor wariness about how troubles at an alternative mortgage lender could impact the country's red-hot housing market.

"The money flow shows you the way," said Diana Avigdor, head of trading at Barometer Capital Management.

Avigdor is bullish on stocks but has cut her exposure to Canada in favor of the U.S. as some of the most heavily weighted groups on the TSX, such as financials, began to lose momentum.

Financial stocks fell to a five-month low, down 0.8 percent, after Moody's Investor Service cut the long-term ratings for Canada's six biggest banks, citing the rise in private-sector debt and unchecked house price appreciation.

Canadian Imperial Bank of Commerce (CM.TO: Quote) fell 1.3 percent to C$107.33, while National Bank of Canada (NA.TO: Quote) declined 2.3 percent to C$52.91.

Canada's largest pipeline company, Enbridge Inc (ENB.TO: Quote), was by far the most influential mover on the downside, however, sliding 2.0 percent to C$54.80 after it reported a lower-than-expected quarterly profit.

The overall energy group fell 0.7 percent even as U.S. crude oil prices rose.   Continued...

 
FILE PHOTO -  A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.  REUTERS/Mark Blinch/File Photo