August 10, 2017 / 11:35 AM / 4 months ago

TSX hits one-month low on North Korea tensions, lower oil prices

TORONTO (Reuters) - Canada’s main stock index hit its lowest close in a month on Thursday as oil prices fell and investors sought refuge in safe-haven assets amid rising tensions between the United States and North Korea.

FILE PHOTO - A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, Ontario, Canada on June 23, 2014. REUTERS/Mark Blinch/File Photo

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 percent to C$24.43, its largest drop since early August last year.

Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off.

The overall financials group, which accounts for roughly a third of the index, declined 1.4 percent, while energy shares also fell 1.4 percent as oil prices turned down.

U.S. crude oil futures settled nearly 2 percent lower at $48.59 a barrel, as Russia considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

The Toronto Stock Exchange’s S&P/TSX composite index closed down 143.08 points, or 0.94 percent, at 15,074.25, its lowest close since July 7. It was the biggest percentage loss since mid-June.

“I think the market was looking for a reason to come off here,” said Irwin Michael, portfolio manager at ABC Funds. “The North Korea situation appears to be the culprit.”

U.S. President Donald Trump ratcheted up his rhetoric toward North Korea on Thursday, saying the reclusive communist country should be “very, very nervous” if it even thinks about attacking the United States or its allies.

Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index’s 10 main sectors, rising 0.7 percent.

Barrick Gold Corp rose 2.3 percent to C$21.74 as the price of gold, a safe-haven asset, reached its highest levels in two months. [GOL/]

Pan American Silver Corp, which reported second-quarter results late Wednesday, rallied 10.7 percent to C$22.47.

Nevsun Resources Ltd offset some of the material group’s gains, plunging 16.4 percent to C$2.75 after the company reported disappointing quarterly results.

In other corporate results, a number of companies reported forecast-beating numbers. TMX Group Ltd was up 3.2 percent to C$68.02, while Quebecor Inc added 4.3 percent to C$45.20 and Canadian Tire Corp Ltd climbed 5.7 percent to C$149.89.

“Generally, earnings are good, ... it’s our view that this pullback (in stocks) should provide good buying opportunities,” ABC Funds’ Michael said.

Additional reporting by Solarina Ho; Editing by Nick Zieminski and Leslie Adler

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