TORONTO (Reuters) - Canada’s main stock index fell to its lowest level in more than six weeks on Wednesday as banks and energy firms were hit by ongoing concerns that central banks will ease up on monetary stimulus sooner than expected.
The drop on the resource-heavy Canadian benchmark index extended the steep losses of the previous session as concerns about whether the U.S. Federal Reserve will roll back its stimulus program failed to go away.
The TSX index has declined in eight of the past nine sessions. Wednesday’s weakness mirrored a broad selloff on U.S. markets.
“We’re in a bit of an equity correction phase,” said Marcus Xu, president of Vancouver-based MY Capital Management Corp. “The markets got used to having the liquidity, the money-printing habit from all the central bankers. Once that stops, the market goes down. It’s not entirely rational.”
The TSX has lagged U.S. and other major stock markets sharply this year.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 113.68 points, or 0.9 percent, at 12,109.89, after dropping as low as 12,092.53, its lowest point since April 24. Nine of the 10 subgroups on the index fell.
Financials, the index’s most heavily weighted sector, dropped 0.92 percent. Toronto-Dominion Bank (TD.TO) led the fall, ending the day down more than 1 percent at C$80.82.
Discount retailer Dollarama Inc (DOL.TO) fell 3.4 percent to C$70.13 after its quarterly results disappointed the market. The dollar store operator blamed poor weather and the cost of opening new stores for weaker-than-expected first-quarter earnings.
The lone bright spot on the index was the materials group, which gained 0.08 percent on the back of gold producers, which were helped by a rise in the bullion price from Tuesday’s three-week low.<GOL/>
Goldcorp Inc (ABX.TO) added 1.3 percent to C$28.65 and had the biggest positive influence on the index.
Editing by Peter Galloway