Slumping oil, China worries hit TSX's resource stocks

Mon Oct 19, 2015 5:00pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell on Monday as slumping oil prices and worries over slowing Chinese demand hurt energy stocks and miners, while investors largely shrugged off political risk from a federal election that could lead to a change in government.

Oil fell about 4 percent, and the influential energy group on Toronto Stock Exchange's S&P/TSX composite index .GSPTSE followed it down 3 percent.

The materials group, which included miners, lost 2.2 percent and healthcare also slipped.

But the seven other main groups all rose, as the index closed down 79.72 points, or 0.58 percent, at 13,758.38. That was its lowest close in almost two weeks.

The most influential mover on the index was Valeant Pharmaceutical International Inc (VRX.TO: Quote), which fell 4.7 percent to C$216.75. The company, facing heavy criticism for sharply increasing the prices of drugs it acquired, said the pace of those price hikes would moderate.

"The fact that the domestic components are up, outside of certain idiosyncratic areas such as healthcare, suggests that people aren't that worried about the election," said John Johnston, chief strategy officer at Davis-Rea.

Canadian voters may oust Conservative Prime Minister Stephen Harper's government, polls suggest, amid a late surge by Liberal rival Justin Trudeau.

Johnston said the most likely scenarios from the vote, whose results are expected later on Monday night, would not change his dim view on Canadian equities.   Continued...

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