TSX at eight-month low, hits ‘correction territory’

Tue Oct 14, 2014 5:40pm EDT
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By John Tilak and Alastair Sharp

TORONTO (Reuters) - Canada's main stock index hit an eight-month low on Tuesday, dropping more than 11 percent from last month's record high as plunging international oil prices took domestic energy producers down with them.

Crude shed almost $4 a barrel as mounting evidence of slackening demand and unrelenting U.S. shale output left traders struggling to find a floor for oil's four-month rout.

The resource-focused TSX index suffered a third straight session of 1 percent-plus losses.

"It certainly seems like it's nothing short of a bloodbath, especially in the energy patch," said Elvis Picardo, a strategist at Global Securities in Vancouver.

Pipeline operator TransCanada Corp (TRP.TO: Quote) slumped 5.6 percent to C$50.53 ($44.76), Canadian Natural Resources Ltd (CNQ.TO: Quote) lost 5 percent to C$36.56 and Enbridge Inc (ENB.TO: Quote) gave up 3.3 percent to close at C$48.63.

"The sentiment has collapsed," Picardo said. "When you see a decline of this magnitude, it sometimes smacks of panic selling, and that's exactly what's happening right now."

The International Energy Agency cut its forecast for oil demand, and U.S. forecasts projected another big bump in shale production.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended the day down 190.68 points, or 1.34 percent, at 14,036.68. Nine of the 10 main sectors closed in the red.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.  REUTERS/Mark Blinch