TORONTO (Reuters) - Canada’s main stock index fell on Thursday after signs of a slowdown in China’s manufacturing industry helped fuel declines in the energy and financial sectors, offsetting gains in gold-mining shares.
A selloff in oil prices, as Libya prepared to restart a major oilfield and market speculation of a rise in crude stockpiles in Cushing, Oklahoma, further dampened investor sentiment. <O/R>
Official and private manufacturing surveys showed Chinese factory activity moderated in December. Data indicating that U.S. manufacturing grew in December at its fastest pace in 11 months failed to give investors a boost.
The export-driven Canadian market eased on the first trading day of 2014, after recording a 9.6 percent gain last year, when equity markets rallied on the back of liquidity injected into the market by the U.S. Federal Reserve.
“The overwhelming theme we’re likely to see in 2014 could be the same theme we saw in 2013, which is the eventual withdrawal of the extraordinary monetary stimulus we’ve seen in the United States and all over the world,” said Craig Lazzara, global head of index investment strategy at S&P Dow Jones Indices.
“You would expect interest rates would go up; you would expect that to flow through the entire global financial system, certainly including Canada,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 27.36 points, or 0.20 percent, at 13,594.19.
Investors were cautious about the prospects for the Toronto stock market, whose gains in 2013 badly trailed those of U.S. indexes.
“I think we’re going to have positive returns, but it’s pretty hard to get too excited (about the Canadian market),” said Luciano Orengo, a portfolio manager at Manulife Asset Management, who expects high single-digit gains for the TSX in 2014.
Investors should, however, look for pockets of strength within the resource groups.
“There could be some upside surprises in the energy sector as U.S. investors look for better bargains in Canada and you could have a resurgence of mining companies,” Orengo said.
Seven of the 10 main sectors on the index were in the red on Thursday.
With the price of U.S. crude oil shedding almost 3 percent, energy shares dropped.
Financials, the index’s most heavily weighted sector, declined 0.6 percent. Toronto Dominion Bank (TD.TO) slipped 0.4 percent to C$98.87.
But the materials sector added 2.1 percent, helped by a 4.4 percent jump in shares of gold producers, supported by a higher bullion price. <GOL/>
Goldcorp Inc G.TO climbed 4.7 percent to C$24.13, and Barrick Gold Corp (ABX.TO) gained 4.4 percent to C$19.54.
Shares of Bombardier Inc (BBDb.TO) edged up to C$4.64 after the company said late on Tuesday that it received a firm order from an undisclosed customer for 38 business aircraft in a deal valued at about $2.2 billion.
Editing by Nick Zieminski and Leslie Adler