TSX suffers largest drop since February as oil slides

Fri Jun 10, 2016 4:53pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index posted its largest drop since February on Friday, falling to a one-week low as energy stocks tumbled with oil prices and global equity markets broadly moved lower.

The index ended 1.3 percent lower for the week after having touched on Wednesday its highest in nearly 10 months at 14,450.91.

"A large part (of the sell-off) has to do with profit taking," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Concern that low bond yields are signaling deflation has contributed to negative sentiment, while trend following investors sold stocks as the market turned lower, Nakamoto added.

The energy group tumbled 3.8 percent as oil slipped from 2016 highs hit earlier in the week. U.S. crude oil futures CLc1 settled $1.49 lower at $49.07 a barrel. [O/R]

Canadian Natural Resources (CNQ.TO: Quote) declined 3.9 percent to C$36.61. The company and Cenovus Energy (CVE.TO: Quote) both said they had restarted operations at oil sands facilities in Alberta on Thursday after a wildfire threat dissipated.

Suncor Energy Inc (SU.TO: Quote) fell 2.3 percent to C$34.38.

The financials group slipped 1 percent, with Royal Bank of Canada (RY.TO: Quote) down nearly 1 percent at C$78.57 and Bank of Nova Scotia (BNS.TO: Quote) off 1.6 percent at C$65.25.   Continued...

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