TORONTO (Reuters) - Canada’s main stock index slumped to its lowest in more than three months on Thursday, led by declines in energy and financial shares, as weak U.S. jobless claims numbers revived concerns about the health of the world’s biggest economy.
The benchmark Canadian index, which recorded its biggest one-day percentage decline in more than nine months on Wednesday, fell for the fourth straight session amid a spate of negative economic news in recent days.
Data showed that the number of Americans filing new claims for unemployment benefits hit a four-month high last week, suggesting the labor market recovery lost some steam in March.
“The market is like a hot air balloon. You’ve got to keep on pumping in hot air to make it go up,” said Luciano Orengo, portfolio manager with Manulife Asset Management.
“The recovery story in the United States is not dead,” he said. “You’re seeing the economy take a bit of a breather.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 59.07 points, or 0.48 percent, at 12,363.05, after reaching 12,338.32, its lowest point since December 31, 2012.
The Canadian market’s weakness was in contrast to the gains made by U.S. stocks.
“The big picture thesis is that it’s a story mostly about Canada,” said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets. “Global index managers are reducing their exposure to Canada.”
Wednesday’s decline put the TSX in the red for the year. That is typically a rule of thumb for fund managers to pull back, Mokhtari said.
Seven of the market’s 10 main sectors were in the red on Thursday.
The energy group gave back 1.9 percent as oil prices declined. Suncor Energy Inc (SU.TO) fell 3 percent to C$29.28.
Financials, the index’s weightiest sector, slipped 1.3 percent. Royal Bank of Canada (RY.TO) lost 1.5 percent to C$60.39.
But the materials sector, which includes gold and base metal mining stocks, gained 1.7 percent.
Shares of gold miners jumped more than 2 percent as investors nervously eyed major monetary policy moves. Aggressive actions by central banks often support gold producers.
The Bank of Japan on Thursday unleashed the world’s most intense burst of monetary stimulus, promising to inject about $1.4 trillion into the economy in less than two years, a radical gamble that sent the yen reeling.
Yamana Gold Inc (YRI.TO) added 3.5 percent to C$14.42.
In company news, Toronto-based Dominion Diamond Corp DDC.TO, formerly Harry Winston Diamond Corp, reported late on Wednesday an increase in fourth-quarter sales on rising demand in the United States, China And India. The stock climbed 4.7 percent to C$16.67.
Canadian Pacific Railway Ltd (CP.TO) said it had discovered a second leak at the site of Wednesday’s derailment in northern Ontario and estimated that about 400 barrels of crude oil had escaped in total. CP shares fell 0.7 percent to C$121.67.
Editing by Jeffrey Hodgson and Grant McCool