TORONTO (Reuters) - Canada’s main stock index dipped on Monday as energy and industrial sector shares declined, extending a drop recorded in the previous week.
Equity markets have been battered recently, pulled lower by strength in the U.S. dollar, geopolitical concerns and the U.S. Federal Reserve’s monetary policy.
Investors digested comments from New York Fed President William Dudley, who said he would be “delighted” to raise interest rates some time next year since it would be a sign of economic success, but for now a “very accommodative monetary policy” is still needed.
The benchmark TSX, which has dropped in each of the past five weeks, has been coming down steadily after hitting a record high last month.
The Canadian market’s valuations are still too expensive, said John Ing, president of Maison Placements Canada, who expects the market to sell off further.
“The TSX is trading very much on the upper end of the range,” he said. “The market has been on fumes, it’s been a richly valued.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 46.66 points, or 0.32 percent, at 14,743.12. Eight of the 10 main sectors on the index were in the red.
The energy sector gave back 0.7 percent, despite a gain in the price of oil. Suncor Energy Inc (SU.TO) lost 0.8 percent to C$39.55, and Canadian Natural Resources Ltd (CNQ.TO) fell 0.4 percent to C$41.36.
Industrials dropped 1.1 percent. Canadian National Railway Co (CNR.TO) slipped 1.8 percent to C$77.72.
Air Canada ACb.TO jumped 3.9 percent, to C$8.18, after reaching a tentative agreement with its pilots’ union on a new 10-year contract a year and a half ahead of the expiry of the current contract.
The materials sector, which includes mining stocks, benefited from strength in the prices of commodities such as gold, silver and copper. First Quantum Minerals Ltd (FM.TO) advanced 0.9 percent to C$21.03, and Goldcorp Inc (G.TO) jumped 1.1 percent to C$25.76.
Editing by Meredith Mazzilli and Andre Grenon