TORONTO (Reuters) - Canada’s main stock index dropped on Tuesday as worries that the U.S. Federal Reserve might cut back its stimulus program weighed on commodity prices, hitting heavyweight energy and materials shares.
Investors also digested news that China’s ruling party pledged to let markets play a “decisive” role in allocating resources as it unveiled a reform agenda for the next decade.
Meanwhile, a slew of economic data unveiled last week, including robust U.S. jobs numbers, continued to spark fears that the Fed might scale back its stimulus measures.
Fed Vice Chair Janet Yellen is expected to be nominated in a U.S. Senate Banking Committee hearing on Thursday to replace Ben Bernanke at the helm of the central bank.
“The market is waiting for (Yellen) to take over and see what she’s going to do about the economy,” said Ron Meisels, technical analyst and president of Phases & Cycles, who does not expect any dramatic change in Fed policy.
The Canadian market declined for a second straight session after jumping about 4 percent in the past month.
“Toronto had a fantastic rise from early October, and some of the stocks here in Canada are getting a little bit tired,” Meisels said. “I will not be surprised if there’s a bit of a correction.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 32.35 points, or 0.24 percent, at 13,326.04.
Six of the 10 main sectors on the index were higher.
Financials, the index’s weightiest sector, slipped slightly, with Royal Bank of Canada (RY.TO) losing 0.3 percent to C$69.88.
Shoppers Drug Mart Corp SC.TO reported slightly lower quarterly net income due in part to charges from its pending acquisition by grocer Loblaw Cos Ltd (L.TO). That didn’t stop shares of the pharmacy chain from climbing 0.5 percent to C$61.05.
Shares of Rona Inc RON.TO jumped 3.7 percent to C$12.45 after the home improvement chain reported a bigger quarterly profit as it cut costs, but competition and cooling new home construction hurt sales.
Editing by Peter Galloway