TORONTO (Reuters) - Canada’s benchmark stock index fell on Thursday in a broad retreat, with Tahoe Resources Inc plunging after its license to operate in Guatemala was suspended and Toronto housing data weighing on the financial sector.
Tahoe’s Canada-listed shares ended down 33.2 percent at C$7.19 as the company said the suspension of operations at its flagship Escobal silver mine meant it could no longer confirm its previously issued 2017 outlook. Several banks cut their target prices and recommendations on the stock.
It is not clear how long the mine will be closed, as the company takes legal steps to have the license reinstated while the case is heard.
“If it’s shut down for three months, then 30 percent is probably a bit of an overreaction,” said Ian Scott, an equity analyst at Manulife Asset Management. “If you’re down for a year or longer, then maybe it’s a bit more onside.”
Scott said that lingering housing concerns weighed on banking stocks that should have otherwise benefited more from a broad rise on global bond yields.
Home sales in the red-hot Toronto market fell for the third consecutive month in June, while more owners put their properties up for sale as they worried a rapid acceleration in prices had peaked, data showed.
“As long as those housing concerns still linger and as long as oil isn’t acting properly, you could see the TSX trading lower,” Scott said.
Energy stocks ended off 0.7 percent, as an oil rally faded despite a sharper-than-expected decline in U.S. crude oil and gasoline stocks.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 75.24 points, or 0.50 percent, at 15,077.88, its fourth down day in five.
Nine of its 10 main sectors fell, with telecoms notching a slight gain. Decliners outnumbered advancers by almost 4-to-1 overall.
Air Canada jumped 10.7 percent to C$19.20 after the airline said it expected its earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent to “significantly exceed” analysts’ expectations.
Smaller rival Westjet Airlines Ltd added 3.1 percent to C$24.27.
Alternative lender Home Capital Group Inc fell 5.9 percent to C$15.89 and rival Street Capital Group Inc lost 9.8 percent to C$1.20 after a financial regulator said it planned to clamp down on risky lending, six months after a Reuters investigation revealed that regulated mortgage providers were teaming up with unregulated rivals to circumvent rules limiting how much they can lend against a property.
Reporting by Alastair Sharp; Editing by Peter Cooney