Materials shares pull TSX down for worst day in over 8 weeks

Wed Aug 24, 2016 5:22pm EDT
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TORONTO/OTTAWA (Reuters) - Canada's main stock index posted its biggest decline in more than eight weeks on Wednesday as lower metal and oil prices sent shares of resource companies tumbling.

The decline in the materials and energy sectors easily outweighed gains in financial stocks after better-than-expected bank earnings this week.

The materials group .GSPTTMT, which includes precious and base metals miners and fertilizer companies, was the biggest loser, shedding 5.8 percent as copper and gold prices fell. Barrick Gold (ABX.TO: Quote) had its worst day in over a year. [MET/L][GOL/]

Investors were also looking ahead to a speech from U.S. Federal Reserve Chair Janet Yellen at the end of the week with markets hoping for a sign on whether the Fed will raise interest rates before the end of the year.

That uncertainty may have prompted investors to take some money off the table, adding to losses in materials shares that have performed strongly this year, said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

Recent comments from Fed policymakers have sounded more confident on the possibility of a rate hike but minutes from the central bank's last meeting showed members were torn.

"Opinion is divided and certainly in recent weeks the odds have gone up a little bit, but it still very much remains a toss of the coin," said Picardo.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 138.53 points, or 0.94 percent, at 14,626.24.

It was the index's biggest percentage loss since June 27. Of the index's 10 main groups, seven were in negative territory.   Continued...

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