OTTAWA (Reuters) - Canada’s main stock index was down for the second day in a row on Friday as energy shares fell alongside the price of oil and financial shares came under pressure.
U.S. crude CLc1 prices were down 1.5 percent to $59.86 a barrel after Saudi Arabia said it stood ready to raise output to new records.
The energy sector led the way down, falling 1 percent. Among the laggards, Suncor Energy (SU.TO) fell 1.1 percent to C$35.14, while Canadian Oil Sands COS.TO dropped 2.4 percent to C$9.99.
Canadian Natural Resources (CNQ.TO) tumbled 1.7 percent to C$36.06 as it was caught in the broader energy sell-off, despite saying output at its Primrose and Kirby South oil sands projects had returned to normal levels after wildfires in northeastern Alberta.
“The bigger issue for oil companies is that if oil stays around these levels, they’re going to feel more pain because, especially large-cap oil companies, their cost structure is way out of whack with their returns,” said Paul Harris, portfolio manager at Avenue Investment Management, in Toronto.
At 10:53 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE fell 85.81 points, or 0.58 percent, to 14,745.07.
After touching a seven-month high in mid-April, the index has since waned as investors have taken in disappointing economic data on both sides of the border. The uncertainty around when the Federal Reserve will start to raise interest rates adds to the sense of a lack of direction, said Harris.
“In our view, you probably see a pullback just simply because this is a bad time of the year,” said Harris. “Seasonally, people are weary of the stock market and the market seems to be wanting to go down as opposed to going up.”
Of the index’s 10 main groups, all but one were in negative territory.
A gain in gold producers bucked the broader descent in commodity shares as the gold subsector rose 0.3 percent after falling sharply on Thursday and as the price of gold futures GCv1 steadied.
A drop in financial shares .SPTTFS also contributed to the broad decline, with the group down 0.9 percent. Royal Bank of Canada (RY.TO) fell 0.8 percent to C$77.53, while Toronto Dominion Bank (TD.TO) lost 1.3 percent to C$53.88.
Reporting by Leah Schnurr; Editing by Andrew Hay