TSX falls to two-week low as gold miners plunge

Tue Oct 4, 2016 5:09pm EDT
 
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By Fergal Smith

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   Continued...

 
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. Canada's main stock index was little changed on Monday as weakness in financial and energy shares offset gains in the materials sector.   REUTERS/Mark Blinch (CANADA - Tags: BUSINESS) - RTR3VBWJ