TORONTO (Reuters) - Canada’s main stock index slumped on Wednesday to its lowest close in six months as energy stocks were hit by a sharp retreat in the price of oil and loyalty program company Aimia fell sharply after suspending its dividend payments.
The energy group fell 3.9 percent as oil prices moved lower by a similar degree, hit by an unexpected large buildup in gasoline inventories and an international outlook that suggests a big increase in supply in the coming year.
“It was a bloodbath today,” said Brandon Michael, an investment analyst at ABC Funds. “No matter what OPEC is doing, these shale producers are just proving to be very persistent and keep on pumping oil out.”
Suncor Energy Inc fell 3.6 percent to C$39.40 and Canadian Natural Resources Ltd lost 4.2 percent to C$37.36.
Aimia Inc slumped 19.1 percent to C$1.53 after cancelling dividends with immediate effect and announcing the resignation of three directors, a month after Air Canada announced a plan to replace the company’s loyalty program with its own.
Materials stocks also weighed on the resource-rich index, down 3.2 percent overall as gold miners lost ground with the precious metal after the U.S. Federal Reserve raised rates and said it was prepared to continue tightening monetary policy.
The Toronto Stock Exchange’s S&P/TSX composite index lost 209.62 points, ending the session down 1.36 percent at 15,170.13.
There were six decliners for every advancer and eight of the index’s 10 main groups were lower, with the financials group slipping 0.5 percent and industrials falling 0.9 percent.
“We opened at the highs of the day and we closed at the lows today, that’s definitely very bearish, and you may get some continuation tomorrow,” ABC’s Michael said.
Alternative lender Home Capital Group made a dramatic reversal after Reuters reported it was in talks with a syndicate of banks, including some of Canada’s biggest lenders, to secure a loan of about C$2 billion ($1.5 billion) to replace a costly emergency credit line.
It closed up 7.5 percent at C$12.13 after trading as low as C$9.77 during the session.
Restaurant Brands International Inc advanced 3.2 percent to C$78.36. Oppenheimer raised the owner of Burger King and Tim Hortons to outperform from perform, according to thefly.com.
Reporting by Alastair Sharp; Editing by W Simon and Peter Cooney