TORONTO (Reuters) - Canada’s main stock index dropped on Tuesday amid a selloff in shares of energy and gold producers as investors focused on congressional testimony by U.S. Federal Reserve Chair Janet Yellen.
Oil prices tumbled to a three-month low before recovering some of those losses as output from Libya increased, easing some of the market’s concerns. The bullion price slipped after the Fed commentary. [O/R] [GOL/]
Yellen told a Senate committee that the U.S. economic recovery remains incomplete, with a still-ailing job market and stagnant wages justifying loose monetary policy for the foreseeable future.
“It’s going to be status quo for quite a while. It’s going to be a low interest rate environment for quite some time. That could be the new reality,” said Kevin Headland, director, portfolio advisory group, at Manulife Asset Management.
He expects the market to moderate after a strong run-up in recent months.
“I don’t see how we can get that much higher on the TSX based on fundamentals,” he added. “I don’t think future earnings growth is going to be that robust.”
The Toronto Stock Exchange’s S&P/TSX composite index closed down 89.91 points, or 0.59 percent, at 15,081.32. The Canadian benchmark has been one of the strongest performers among global stock market indexes this year, rising about 11 percent.
Eight of the 10 main sectors on the index were in the red on Tuesday.
The gold-mining sector extended its slide from the previous session. Barrick Gold Corp shed 2.6 percent to C$19.71, and Goldcorp Inc fell 2.5 percent to C$29.03.
Shares of energy producers were hit by the oil-price decline. Canadian Natural Resources Ltd gave back 2.3 percent to C$47.41, and Suncor Energy Inc lost 1.8 percent to C$44.19.
Financials, the index’s most heavily weighted sector, advanced 0.3 percent. Royal Bank of Canada climbed 0.6 percent to $79.19, and Bank of Nova Scotia added 0.4 percent to C$72.76.
Editing by Peter Galloway and Tom Brown