TORONTO (Reuters) - Canada’s main stock index dropped on Monday as weak economic data from China made itself felt and a lower oil price hit the shares of energy producers.
Figures showed that growth in the Chinese services sector slumped to a nine-month low in October, highlighting concerns about a slowdown in the world’s second-biggest economy.
The U.S. dollar also has been surging since the Bank of Japan unveiled new stimulus measures late last week and that has put pressure on commodity prices such as oil and bullion.
The Toronto stock market’s energy sector, which has lost a quarter of its value since the middle of June, shed 2.4 percent and had the biggest negative influence on the benchmark index.
“We’ve had another bad day for oil. The U.S. dollar trade is putting commodities down,” said Marcus Xu, portfolio manager and president at M.Y. Capital Management Corp in Vancouver. “A lot of people are sitting on the sidelines.”
However, the selloff in energy shares have made them attractive.
“There’s a big discount,“ Xu added. ”You can pick and choose some high-quality names that will be around for a long time.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 75.70 points, or 0.52 percent, at 14,537.62. Five of the 10 main sectors on the index were in the red.
Editing by Peter Galloway and Andre Grenon