August 7, 2014 / 11:51 AM / 4 years ago

TSX declines as Russia-Ukraine crisis intensifies

TORONTO (Reuters) - Canada’s main stock index dropped on Thursday as worries about the escalating crisis in Ukraine fueled declines in most major sectors.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Focusing on Ukraine, investors ignored U.S. government figures showing that the number of Americans filing new claims for unemployment benefits fell unexpectedly last week.

Violence was at an elevated level in Ukraine a day after Russia announced plans to ban imports of food from the United States and fruits and vegetables from Europe in response to U.S. and European Union sanctions.

Also weighing on the market, shares of Air Canada ACb.TO tumbled 8.1 percent after the carrier said yields, or passenger revenue per available seat mile, a key measure of revenue, fell in the second quarter.

While the benchmark TSX index is still up about 11 percent since the start of the year, it has ended four of the past five sessions in negative territory.

“It’s basically fear taking over. The Russia-Ukraine crisis is scaring investors,” said Marcus Xu, portfolio manager and president at M.Y. Capital Management Corp in Vancouver.

“I still think that the market will close the year higher from here,” he said, adding that he expects it to outperform its U.S. counterpart slightly in 2014.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 83.66 points, or 0.55 percent, at 15,118.43. Eight of the 10 main sectors on the index were in the red.

Financials, the index’s most heavily weighted sector, slipped 0.8 percent, with Bank of Nova Scotia (BNS.TO) losing 1 percent to C$72.19 and Bank of Montreal (BMO.TO) declining 0.9 percent to C$79.46.

Manulife Financial Corp (MFC.TO) raised its dividend for the first time since the financial crisis and reported a quarterly profit that jumped on stronger financial markets. The insurer’s stock was up in early trading but ended the day 2.6 percent lower at C$21.70.

The gold-mining sector climbed with the bullion price, extending the previous session’s rally. Goldcorp Inc (G.TO) advanced 0.5 percent to C$30.89, and Barrick Gold Corp (ABX.TO) added 0.7 percent to C$20.18.

Oil and gas company Canadian Natural Resources Ltd (CNQ.TO) shed 2.2 percent to C$44.82 after it cut its 2014 oil production outlook.

Editing by Peter Galloway

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