TSX plays defense as oil price falls to near 2009 low

Mon Aug 17, 2015 4:43pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index retreated on Monday, with heavyweight energy and banking stocks reacting negatively to a fall in the price of U.S. crude to near a 2009 low and disappointing data from Japan and New York.

Gains among gold miners limited the overall losses, with the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ending the day down 26.35 points, or 0.18 percent, at 14,251.53. Six of its 10 main sectors declined.

The energy sector fell 1.8 percent, with Suncor Energy Inc (SU.TO: Quote) down 1.8 percent at C$36.60, as U.S. crude CLc1 prices fell 1.5 percent to $41.87 a barrel and Brent crude LCOc1 lost 0.9 percent to $48.74. [O/R]

"It's in a very nervous place right now, if it (the price of oil) breaks down a couple more dollars it could be very, very ugly," said John Kinsey, a portfolio manager at Caldwell Securities.

Crude slipped after Japan said its economy shrank in the second quarter, while China's slowing growth is also causing concern.

Meanwhile, manufacturing activity in New York state plunged in August to its weakest since 2009.

The United States is by far Canada's largest trading partner and investors hope recovery south of the border stimulates activity here.

"I do think our economy is weak. There's a lot of problems," Kinsey said.   Continued...

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