TSX slumps more than 1 percent in gold, oil rout
By Solarina Ho
TORONTO (Reuters) - Canada's main stock index closed sharply lower on Monday, in a broad-based rout led by a massive plunge in gold mining and energy shares, hurt by a sharp retreat in commodity prices.
Gold plunged more than 4 percent to five-year lows as sellers in New York and China, a top consumer, dumped the precious metal. With the greenback strengthening ahead of an expected interest rate hike by the Federal Reserve this year, investors have been moving away from holding safe-haven gold.
Meanwhile, U.S. crude sank below $50 a barrel, as a rallying greenback and signs of ample supply pressured the commodity.
The biggest drags on the index were gold miners, with more than a dozen gold names seeing double digit percentage drops.
The overall materials group, home to mining companies, tumbled 6.3 percent to its lowest since the financial crisis in December 2008. The S&P/TSX Global Gold index .SPTTGD plunged 11.2 percent.
Energy stocks followed close behind, falling 3.3 percent. Canadian Natural Resources (CNQ.TO: Quote) ended down 4 percent to C$31.47 and Enbridge Inc (ENB.TO: Quote) finished down 2.2 percent to C$58.25.
"With the U.S. dollar continuing to move upward, with China's deceleration in growth, I just don't think that there is the catalyst for gold and energy and other resources to rebound anytime soon," said Stan Wong, Director of Wealth Management & Portfolio Manager at ScotiaMcLeod. Continued...