TORONTO (Reuters) - Canada’s benchmark stock index closed sharply lower on Tuesday as energy shares dived alongside oil prices, while Cenovus Energy Inc tumbled after the company said its chief executive was stepping down.
Cenovus said it would replace Chief Executive Brian Ferguson, who championed an unpopular purchase of western Canadian oil sands assets, but did not name a successor, sending its shares down 8.2 percent to close at C$9.44. Earlier in the session, shares touched a record low of C$9.11.
The overall energy group fell 2.2 percent, paring some of its earlier losses, but still hitting its lowest since April 2016. Oil and gas company shares fell as crude prices slumped following news of increases in supply by several key producers. [O/R]
U.S. crude prices, which traded around nine-month lows, were down 2.2 percent to $43.34 a barrel after falling more than 3 percent earlier in the session.
“There’s no apparent relief in terms of (OPEC) cooperation and production cutback,” said Michael Sprung, president at Sprung Investment Management Inc. Sprung said an increase in consumption during the summer driving months would hopefully curtail inventory builds.
Enbridge Inc fell 2 percent to C$50.06, while Suncor Energy fell 2.3 percent to C$38.11.
Bank shares, which had rallied on Monday, also lost ground. Royal Bank of Canada fell 0.6 percent to C$93.76, while the overall financial services group fell 0.5 percent.
“Financials - they are stronger then the markets are giving them credit for,” said Sprung, adding that concerns remained about the housing sector.
Shares of Home Capital Group Inc climbed 4.3 percent to C$15.42 after the alternative lender said it would sell a portfolio of commercial mortgage assets valued at C$1.2 billion to private equity firm KingSett Capital.
The Toronto Stock Exchange’s S&P/TSX composite index fell 116.44 points, or 0.76 percent, to 15,149.60.
Nine of the index’s 10 main groups were lower. Industrials fell 0.7 percent as railroad stocks lost ground, while the materials group, which includes precious and base metals miners and fertilizer companies, declined 0.5 percent.
Gold futures fell 0.2 percent to $1,241.5 an ounce as the U.S. dollar climbed and copper prices declined 1.0 percent to $5,668 a tonne. [GOL/][MET/L]
Healthcare also fell sharply, retreating 1 percent.
Canadian wholesale trade rose more than expected in April, led by the machinery industry, data from Statistics Canada showed. The 1.0 percent increase topped economists’ estimates for a gain of 0.5 percent.
Editing by Peter Cooney