TORONTO (Reuters) - Canada’s benchmark stock index fell more than 100 points on Wednesday as a sharp drop in oil prices weighed on energy shares, while the financial and industrial groups also lost ground.
U.S. crude CLc1 prices settled more than 5 percent lower at $50.28 a barrel as U.S. crude inventories surged to a record high, stoking concerns that a global glut could persist.
Major energy company Canadian Natural Resources Ltd (CNQ.TO) fell 4.6 percent to C$39.43, while the overall energy sector tumbled nearly 4 percent, posting its lowest close since September. The sector is now down 12 percent since the start of the year.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 111.8 points, or 0.72 percent, at 15,496.98. It was just the second time the index has fallen by more than 100 points since January.
“With the threat of interest rates possibly rising and the fact that markets have run so far, particularly over the past few months, we wouldn’t be surprised to see some sort of correction in here somewhere along the line,” said Michael Sprung, president at Sprung Investment Management.
U.S. private sector job growth recorded its biggest increase in more than a year in February. Signs of sustained labor market strength, if confirmed by the U.S. government’s closely followed monthly employment report on Friday, could encourage the Federal Reserve to hike interest rates next week.
“Valuations are just getting a little stretched and it is getting very difficult to find things that we would want to buy in this market. If anything we have been more of a net seller lately,” Sprung said.
The heavyweight financials group dipped 0.2 percent even as bond yields climbed, while industrials retreated 0.6 percent, with Bombardier falling heavily for a third straight day.
Bombardier shares were down 5.8 percent at C$2.10, the lowest close this year.
Eight of the index’s 10 main groups ended lower, with the materials group, which includes precious and base metals miners and fertilizer companies, dipping 0.1 percent.
Copper prices slipped to a one-month low and gold hit a five-week low as the U.S. dollar gathered strength on the prospect of a U.S. rate hike. [MET/L][GOL/]
Still, some gold stocks climbed, with Barrick Gold Corp (ABX.TO) up 0.9 percent at C$24.06.
Financial technology company DH Corp DH.TO fell 5.1 percent to C$23.28 after it posted lower quarterly adjusted revenue and declined to provide a 2017 forecast.
Additional reporting by Alastair Sharp; Editing by Leslie Adler