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TORONTO (Reuters) - Canada's main stock index fell to its lowest close in more than two weeks on Tuesday as a plunge in gold prices weighed on shares of mining companies, and financial and energy stocks also lost ground.
Gold fell more than 3 percent as forecast-beating U.S. manufacturing data on Monday stoked expectations that the Federal Reserve will lift interest rates by year-end. [GOL/]
"The expectation of lower interest rates or expansive quantitative easing has been one of the main drivers of this market. That view is changing," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates.
"You are getting a number of indications that distortions have built up with quantitative easing and low interest rates and that the central banks themselves are concerned," Kumar added.
The materials sector, which includes precious and base metal miners and fertilizer companies, lost 6.7 percent, while a global gold index heavily populated by Canadian miners dropped 9.3 percent.
Both measures had risen steadily this year until August and have faltered since.
Barrick Gold Corp lost 10.5 percent to C$20.39, and Goldcorp Inc fell 8.1 percent to C$19.00.
Goldcorp said it was temporarily shutting down its Peñasquito gold mine in Mexico as it was unable to safely continue operations due to a week-long blockade by a trucking contractor
The Toronto Stock Exchange's S&P/TSX composite index closed down 168.03 points, or 1.14 percent, at 14,521.01. It was the lowest close for the index since Sept. 19.
Eight of the index's 10 main groups fell
Still, the TSX is expected to extend this year's hefty gains in 2017, a Reuters poll found.
Sun Life Financial Inc rose 0.9 percent to C$42.72. The insurer plans to expand into Singapore and Thailand, a senior company executive said.
However, the overall financial group dipped 0.2 percent, including losses for some of the country's major banks.
Bank of Montreal fell 1.8 percent to C$84.30, while Canadian Imperial Bank of Commerce was down 0.8 percent at C$100.18.
Losses for some bank stocks came one day after the government said it will close a tax loophole and introduce a stress test for insured mortgage lending.
Energy stocks fell 0.3 percent as U.S. crude oil futures settled 12 cents lower at $48.69 a barrel in choppy trade. A surging U.S. dollar and anticipation of higher U.S. crude stockpiles offset optimism about planned output cuts. [O/R]
Additional reporting by Alastair Sharp; Editing by Lisa Von Ahn and Leslie Adler