3 Min Read
(Updates to midmorning)
* Inflation concerns weigh on banking issues
* Energy shares tumble along with oil prices
* Gold producers buoyed by gain in bullion prices
TORONTO, June 19 (Reuters) - The Toronto Stock Exchange's main index sagged on Thursday morning, as energy shares fell while oil tumbled and a jump in inflation underscored concerns over the risks facing the economy.
A $3 retreat in the price of oil knocked the heavyweight energy sector down 1.6 percent, after China said it will raise retail gasoline and diesel prices.
Losses in financial and consumer shares also undercut the benchmark as an increase in Canadian consumer prices highlighted worries over the impact of rising energy prices.
Consumer prices rose 2.2 percent last month due to a sharp increase in gasoline prices. The increase of 1 percent from April to May was the single largest monthly rise since January 1991.
"With inflation climbing here ... people are beginning to realize that we're at the endpoint where they can't continue to reduce rates much further in order to keep the economy going," said Michael Sprung, president at Sprung & Co. Investment Counsel.
The S&P/TSX composite index .GSPTSE was down 126.60 points, or 0.84 percent, at 14,946.53 with nine of its 10 main sectors on the negative side.
Concern that the data could mean an end to interest rate cuts, coming on the heels of last week's surprise decision by the Bank of Canada to hold rates steady, weighed on financial stocks.
Canadian Imperial Commerce (CM.TO) was down 72 Canadian cents, or 1.1 percent, at C$63.79, while Bank of Nova Scotia (BNS.TO) was off 78 Canadian cents, or 1.5 percent, at C$50.37. Overall, the sector lost 1.1 percent.
Worries over the impact that rising costs will have on a stretched consumer took the consumer discretionary and staples groups down 1.3 percent and 0.3 percent respectively.
Shoppers Drug Mart SC.TO was down 70 Canadian cents, or 1.2 percent, at C$56.75, and Gildan Activewear (GIL.TO) retreated 99 Canadian cents, or 3.5 percent, to C$27.14.
On the upside, Cott Corp (BCB.TO) gained 26 Canadian cents, or 10.3 percent, to C$2.79 after it said it plans to focus on private-label drinks while it tries to improve profits by cutting jobs and boosting efficiency.
The gold producers subindex added 1.3 percent, buoyed by a gain in bullion prices, which helped the larger materials sector hold onto a gain of 0.1 percent. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)