3 Min Read
(Adds wealth manager comment, updates prices to close)
By Alastair Sharp
TORONTO, March 3 (Reuters) - Canada's main stock exchange retreated on Tuesday in a broad decline led by financial stocks including Bank of Nova Scotia, which reported a lower-than-expected quarterly profit.
The energy sector, which has fallen in recent months as the price of crude oil has sunk, was the only one of 10 main groups on the index to make a positive move on the day.
"The stronger operators, we feel that, if you look out one or two years, will be able to stabilize their margins perhaps on a slightly higher oil price from here, so we think longer term they are probably attractive buying opportunities," said Roland Chalupka, the chief investment officer of Franklin Templeton Investments Corp's wealth management arm Fiduciary Trust Canada.
Bank of Nova Scotia, Canada's No. 3 lender, fell 1.7 percent to C$65.78. Higher provisions and a softer performance in its investment banking unit hurt business, the company said. Overall, the heavily weighted financials group was down more than 1 percent.
"Canadian financials, there's a lot of question marks about them," Chalupka said. "Not only do you have a falling energy price which some are wondering how much exposure is on the banks' balance sheets, but you've also got home prices ... an expensive real estate market."
The index was also tracking moves in the United States, where markets were taking a pause following the latest records set by the Dow and the S&P, and Nasdaq closing above 5,000 for the first time since March 2000.
"It's not unusual to rally up to something like that and then pull back as people decide to take profits," said Colin Cieszynski, senior market analyst at CMC Markets Canada.
Data showing Canada's economy grew faster than economists had forecast also weighed on the market.
"This has cooled speculation of a Canadian interest rate cut," said Cieszynski, referring to a Bank of Canada interest rate decision due on Wednesday.
The Toronto Stock Exchange's S&P/TSX composite index fell 130.20 points, or 0.85 percent, to 15,133.85.
The materials group, home to mining firms, fell 2.2 percent, while consumer staples stocks were down 1.1 percent.
Energy companies gained 1.1 percent. Suncor Energy Inc gained 1.3 percent to C$37.56 and Cenovus Energy Inc added 2 percent to C$21.82. Canadian Oil Sands Ltd jumped 4.1 percent to C$11.24 after the company said production at a joint venture rose in January. (Additional reporting by Solarina Ho; Editing by James Dalgleish)