TSX falls on commodity retreat, ekes out August gain

Wed Aug 31, 2016 4:55pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell on Wednesday as lower oil and gold prices weighed on energy companies and miners, while financial and other interest rate-sensitive stocks slipped as investors considered the likely path of U.S. interest rates.

The Toronto Stock Exchange's S&P/TSX composite index fell 87.70 points, or 0.60 percent, to 14,597.15.

"Part of the reason for the drop is that some of the commodity-related names have run too far, too fast in Canada," said Barry Schwartz, portfolio manager at Baskin Financial Services.

"Investors are looking for some kind of excuse to sell," he said. "Investors have a heightened sense that possibly the markets are overvalued."

The index eked out a 0.1 percent gain over the course of August but is trading just below a 13-month peak hit mid-month.

The energy group retreated 1.7 percent as oil prices fell 3 percent, while the materials group, which includes precious and base metals miners and fertilizer companies, lost 0.7 percent. [O/R]

Potash Corp gained 2 percent to C$23.76 and Agrium Inc rose 1 percent to C$126.36 a day after the two companies said they were in talks to merge into a fertilizer and farm retailing giant.

Barrick Gold Corp fell 2.3 percent to C$22.29, pressured by gold sliding to a two-month low after forecast-beating U.S. jobs data stoked speculation the Federal Reserve would move ahead with plans to raise interest rates. [GOL/]   Continued...

A Bay Street sign, a symbol of Canada's economic markets and where main financial institutions are located, is seen in Toronto, May 1, 2013. Canada's main stock index fell more than 1 percent on Wednesday, hurt by sluggish economic data from China that hurt commodity prices and weak earnings reports from some of the country's biggest companies.    REUTERS/Mark Blinch (CANADA - Tags: BUSINESS) - RTXZ6RE