TORONTO (Reuters) - Canada’s main stock index slipped on Wednesday, driven by steep declines among gold miners and a retreat among heavily-weighted banks.
Modest gains among energy names offset some of the losses despite volatile trade in crude oil.
Concern over the Greek debt crisis sparked general investor caution, and aspects of the Conservative federal government’s budget seen as harmful to financial shares helped push the banks and insurers, which make up some 35 percent of the index’s weight, down around 0.3 percent.
“We are seeing some weakness in the financials, most of that is due to some of the budget changes,” said Youssef Zohny, a portfolio manager at StennerZohny Investment Partners of Richardson GMP Ltd, referring to provisions to close a tax loophole and strengthen consumer protections.
Royal Bank of Canada declined 0.4 percent to C$79.99, while Canadian Imperial Bank of Commerce slipped 1.1 percent to C$96.00.
The Toronto Stock Exchange’s S&P/TSX composite index ended the day down 41.67 points, or 0.27 percent, at 15,304.77.
“People are also concerned about debt levels of the consumer, concerned about housing, concerned about the general sluggishness of the Canadian economy,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
Six of the index’s 10 main sectors ended lower, with major gold miners among the biggest drags as bullion fell. The overall materials group, ended 2.1 percent lower.
Goldcorp Inc dropped 3.2 percent to C$23.07, while Barrick Gold Corp slumped 4 percent to C$15.13. Agnico Eagle Mines Ltd sank 5.3 percent to close at C$35.58.
Energy names bucked the fortunes of their underlying commodity, however, gaining 0.2 percent overall despite U.S. crude prices seesawing over government data that showed both production declines and higher stockpiles.
“It’s not surprising to see a relief rally” for the badly beaten-up energy sector, Zohny said, “but for a more sustainable rally we’re definitely going to need to see fundamentals improve and there’s no indication that the supply and demand imbalance is fixing itself fast enough.”
Canadian Natural Resources added 0.9 percent to C$40.47, and Suncor Energy Inc gained 0.6 percent at C$40.14.
Oil and gas companies will report earnings in coming weeks, with investors eager to see which ones are able to operate effectively under the constraints of low prices.
Additional reporting by Alastair Sharp; Editing by Peter Galloway and Grant McCool