TORONTO (Reuters) - Canada’s main stock index fell on Wednesday as a slide in oil prices squeezed energy companies, while a quarterly report on the country’s economy cast a cloud over financial shares.
The Toronto Stock Exchange’s S&P/TSX composite index finished down 22.44 points, or 0.2 percent, at 15,349.91, managing to pare much of the session’s earlier losses.
Five of the 10 main sectors on the index fell, with energy, which gave back 1.1 percent, and financial stocks, which lost 0.3 percent, driving a significant chunk of the declines.
Oil and gas companies took a hit after crude prices dropped following an increase in Libyan output, which helped boost monthly OPEC crude production for the first time this year.[O/R]
“On one side you see supply increasing from Libya, you also see OPEC compliance decreasing. Really, markets are losing faith in OPEC’s ability to really prop up oil prices,” said Macan Nia, director, capital markets and strategy, with Manulife Investments.
Nia also noted an increase in U.S. oil production since last year that offsets 40 percent of OPEC’s cuts. Encana Corp fell 3 percent to C$13.13, while Cenovus Energy also gave up 3 percent to C$12.05.
In government data, quarterly gross domestic product figures showed that growth accelerated strongly in the first quarter, but the market’s focus was on economic expectations.
“Could that increase in inventory be a drag on GDP going forward?” asked Nia, who also noted ongoing global concerns about the impact of the country’s overheated real estate market.
Financial stocks are often sensitive to market sentiment on the economy, and Bank of Nova Scotia was down 0.5 percent at C$76.22.
Mining firm Asanko Gold Inc shares tumbled 13.2 percent to C$2.19 before they were halted for most of the session after investment firm Muddy Waters said it was shorting the stock due to concerns about the company’s mining operations in Ghana. Trading is expected to resume on Thursday when markets open.
Element Fleet Management Corp was also hit amid initial speculation it was the target, which proved to be incorrect. The shares, which fell nearly 40 percent before being briefly halted, finished down 15.3 percent, at C$8.56.
The materials group, home to mining firms, lost 0.2 percent, with Teck Resources Ltd sliding 5 percent to C$24.05.
Declining issues outnumbered advancing ones on the TSX by 127 to 117, for a 1.09-to-1 ratio on the downside.
Reporting by Solarina Ho; Editing by W Simon and Dan Grebler