TORONTO (Reuters) - Canada’s main stock index slipped on Wednesday, its first decline in six sessions, as shares of oil and gas companies were weighed down by the stalling momentum of a recent rally in the price of oil.
Investors took some comfort from the minutes of the U.S. Federal Reserve’s last meeting, which showed policymakers were concerned about raising interest rates too quickly.
“If the (U.S.) dollar backs off a little bit and crude oil continues to gain some traction at these prices, that can only be positive for the TSX,” said Elvis Picardo, strategist at Global Securities in Vancouver.
That is not what happened on Wednesday, however, with oil’s comeback rally halted as traders took stock of a 35 percent gain over the past month. [O/R]
Picardo said more turbulent times are likely on the horizon.
“We haven’t really seen the full extent of the damage that this massive slump in crude oil has had on the Canadian economy,” he said.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 71.86 points, or 0.47 percent, at 15,212.75.
Some resource bellwethers rose, such as Teck Resources Ltd TCKb.TO, up 2 percent at C$19.91, but others were off sharply. Canadian Natural Resources Ltd (CNQ.TO) fell 3.4 percent to C$38.20, Suncor Energy Inc (SU.TO) gave up 1.7 percent to C$38.49, and Cenovus Energy Inc (CVE.TO) lost 5 percent to C$22.12.
Cenovus said after the bell on Tuesday that it was raising about C$1.5 billion through a share sale.
Investors also followed news Greece will request an extension of its loan agreement with the euro zone of up to six months. However, Germany said no such deal was in the works and Athens must stick to the terms of its existing bailout.
Financials, the index’s second most heavily weighted sector, shed 1 percent. Toronto-Dominion Bank (TD.TO) gave back 1.7 percent to C$54.63 and Bank of Nova Scotia (BNS.TO) fell 1.5 percent to C$66.39.
Ian Riach, a portfolio manager and director of balanced portfolio management at Franklin Templeton Investments, said he favors equities over bonds but is underweight Canadian stocks in his institutional portfolio because he is more bullish about the U.S. market’s prospects.
“The growth metrics in Canada aren’t as robust as maybe they are in the U.S., and valuations were trading at levels that made a lot of Canadian companies vulnerable to earnings disappointments,” he said.
Additional reporting by John Tilak; Editing by Jonathan Oatis and Meredith Mazzilli