TSX at lowest in seven weeks as Brexit hits financial shares

Mon Jun 27, 2016 5:04pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index notched its lowest close in seven weeks on Monday, as the fallout from Britain's vote to leave the European Union pummeled financial stocks and energy shares fell with retreating oil prices.

The heavyweight financials sector fell 2.1 percent, to its weakest since early April, as uncertainty over London's position as a global financial hub weighed and investors sought to calculate the likely hit to global economic growth.

Oil prices plunged about 2 percent amid a rallying dollar and market uncertainty in the aftermath of Thursday's vote, while Canadian banks fell in sympathy with European peers.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 202.09 points, or 1.45 percent, at 13,689.79, its weakest close since May 9. Seven of its 10 main industry sectors fell, with three decliners for every gainer.

Offsetting the declines was a string of gold miners, as bullion maintained a two-year high hit on Friday.

"The (gold) equities are not overvalued, and we also view the commodity as having a lot more room to run," said James Winckler, research associate at MacNicol and Associates Asset Management.

He added that Brexit should not fundamentally alter the investment thesis for energy companies, which have recovered some of their sharp losses along with crude since early 2016.

"If you were bullish on a turnaround in oil, it shouldn't have changed your perspective," he said.   Continued...

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