TORONTO (Reuters) - Canada’s main stock index recorded its biggest single-day percentage fall in eight weeks on Monday as concerns about the U.S. Federal Reserve’s exit strategy for its stimulus program hit energy and financial shares.
The Toronto market gave up much of the gains it made in the previous week, with every major sector on the index ending in the red.
Rising expectations that the wind-down of the Fed’s bond buying program is imminent created more uncertainty in the market, with investors hoping the release on Wednesday of minutes from the Fed’s last policy meeting would shed light on the U.S. central bank’s intentions.
“Investors are taking some of the profits off the table and want see what shakes out once the Fed begins tapering,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
“You could very well see a knee-jerk reaction when news first comes out about the exact timing of the tapering,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 148.86 points, or 1.17 percent, at 12,588.06, its biggest decline since June 24.
“It looks like we’re into shaky waters,” said Victor Kuntzevitsky, an associate at Northland Wealth Management.
“I do expect more volatility,” he added. “Because of the overhang, investors are not sure where to put the money.”
Financials, the index’s most heavily weighted sector, dropped 0.9 percent. Royal Bank of Canada (RY.TO), the country’s biggest lender, gave back 0.5 percent to C$64.02, and insurer Manulife Financial Corp (MFC.TO) fell 2.6 percent to C$17.21.
Shares of energy companies shed 1.8 percent. Canadian Natural Resources Ltd (CNQ.TO) fell 2.6 percent to C$30.67 and had the biggest negative influence on the market. Suncor Energy Inc (SU.TO) lost 1.1 percent to C$34.93.
The materials sector, which includes mining stocks, stumbled 1.4 percent. Teck Resources Ltd TCKb.TO declined 2.1 percent to C$28.11.
B2Gold Corp (BTO.TO) tumbled more than 13 percent to C$2.95. The gold producer said it is offering $225 million of convertible senior subordinated notes due 2018.
Editing by Dan Grebler