TSX falls on yuan weakness, global demand worries

Wed Aug 12, 2015 5:21pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell on Wednesday as China's currency weakened further, but pared its sharpest losses as oil prices bounced off six-year lows.

Losses were heaviest among banks, fertilizer producers and some energy stocks.

Crude oil prices LCOc1 CLc1 rose following Tuesday's rout, while base metals CMCU3 sank to six-year lows on worries demand from China, the world's top metals buyer, would wane. [MET/L][O/R]

The resource-heavy Toronto market has been hit hard by negative global sentiment that has battered commodity prices.

The latest monetary move in China, which the People's Bank of China says should mean the yuan better reflects market prices, is likely to maintain the pressure.

"I don't see how it can be positive for commodities," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "It just shows that they are concerned about the health of their economy."

Energy stocks fell 0.5 percent, with Canadian Natural Resources Ltd (CNQ.TO: Quote) down 3 percent at C$31.94 and Suncor Energy Inc (SU.TO: Quote) losing 0.7 percent to C$37.49.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE lost 75.14 points, or 0.52 percent, at 14,339.53. Of the index's 10 main groups, seven ended lower.   Continued...

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch