CANADA STOCKS-TSX at eight-month low, hits 'correction territory'

Tue Oct 14, 2014 5:37pm EDT
 
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* TSX down 190.68 points, or 1.34 percent, at 14,036.68
    * Nine of 10 main index sectors decline
    * Energy shares tumble as oil prices weaken

 (Adds strategist comment; updates prices to close)
    By John Tilak and Alastair Sharp
    TORONTO, Oct 14 (Reuters) - Canada's main stock index hit an
eight-month low on Tuesday, dropping more than 11 percent from
last month's record high as  plunging international oil prices
took domestic energy producers down with them. 
    Crude shed almost $4 a barrel as mounting evidence of
slackening demand and unrelenting U.S. shale output left traders
struggling to find a floor for oil's four-month
rout. 
    The resource-focused TSX index suffered a third straight
session of 1 percent-plus losses.
    "It certainly seems like it's nothing short of a bloodbath,
especially in the energy patch," said Elvis Picardo, a
strategist at Global Securities in Vancouver.
    Pipeline operator TransCanada Corp slumped 5.6
percent to C$50.53, Canadian Natural Resources Ltd lost
5 percent to C$36.56 and Enbridge Inc gave up 3.3
percent to close at C$48.63.
    "The sentiment has collapsed," Picardo said. "When you see a
decline of this magnitude, it sometimes smacks of panic selling,
and that's exactly what's happening right now."
    The International Energy Agency cut its forecast for oil
demand, and U.S. forecasts projected another big bump in shale
production.  
    The Toronto Stock Exchange's S&P/TSX composite index
 ended the day down 190.68 points, or 1.34 percent, at
14,036.68. Nine of the 10 main sectors closed in the red.
    The energy sector - a major index contributor - tumbled 3.7
percent and is down about 26 percent since mid-June. 
    "With today's decline, we are now officially in correction
territory," said Craig Fehr, Canadian market strategist at
Edward Jones in St. Louis, Missouri. 
    "We're seeing a weakness, a return to volatility, something
North American markets haven't seen in a while. (These
pullbacks) will be more of the norm than the exception going
forward."
    Fehr expects the Canadian market to be pressured by volatile
commodity prices.
    "It's a reflection that, on a global scale, economic growth
hasn't hit its stride," he added.
    Financials, the index's most heavily weighted sector,
declined 1.1 percent.
    Royal Bank of Canada was down 1.1 percent at C$78.79
and Toronto-Dominion Bank fell 1.2 percent to C$52.58.
    ($1=$1.12 Canadian)

 (Editing by Peter Galloway and Andre Grenon)