TORONTO (Reuters) - Canada’s main stock index on Wednesday posted its biggest single-day percentage drop in about 18 months as fears about sliding oil demand hit the commodity price and shares of energy producers.
The selloff in the price of oil has begun to hurt sentiment for the broader equity market. The benchmark TSX dropped 2.4 percent, sliding to its lowest in nearly eight weeks.
Already battered oil prices slid to five-year lows after the Organization of the Petroleum Exporting Countries cut its forecast for oil demand in 2015.
The market’s heavyweight energy sector, down about 42 percent since mid-June, gave back another 5.5 percent.
The plunge in oil prices has raised questions about the financial health of energy companies and fears that the national economy might be impacted.
“It’s a big risk-off day,” said Marcus Xu, president and portfolio manager at M.Y. Capital Management Corp in Vancouver. “This is just nervousness based on where the market is.”
“I think the selling is a little bit overdone. It tends to get overblown,” he added. “Oil at 60 bucks (a barrel) just doesn’t make any sense.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended 342.78 points lower, or down 2.41 percent, at 13,852.95. All of the 10 main sectors on the index were in the red.
The gold-mining sector was down 2.5 percent. Goldcorp Inc (G.TO) lost 2.5 percent to $22.66.
Yamana Gold Inc (YRI.TO) said it will place some of its Brazilian assets, deemed non-core, into a subsidiary dubbed Brio Gold, and will explore a potential sale along with other options for the unit in 2015. The stock gave back 2.4 percent to C$4.79.
Reporting by John Tilak, editing by G Crosse