TORONTO (Reuters) - Canada’s main stock index dropped on Friday as a 10.5 percent fall in the price of U.S. crude dragged down oil and gas shares, while a weaker bullion price sent shares of gold miners tumbling.
Oil prices, and shares of oil producers by extension, have plunged since the Organization of the Petroleum Exporting Countries (OPEC) decided on Thursday to keep production steady.
The decline in energy shares comes after months of choppiness in the oil price, which has dropped dramatically since June on concerns about oversupply.
Shares of energy producers were down 2.3 percent on Friday, after tumbling nearly 7 percent in the previous session. The Toronto stock market’s energy sector has lost a third of its value since the middle of June.
“We’re still suffering from the misery of the OPEC decision. The Canadian oil patch is really taking it on the chin,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
“It will take a little time for this shock to work its way through,” he said. “These energy companies are going to have to look very carefully at their capital budgets based on the new reality of the oil price.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 177.69 points, or 1.19 percent, at 14,744.75. It ended the week 2.4 percent lower but managed to record a monthly gain.
Six of the 10 main sectors on the index were in the red on Friday.
“A lot of these stocks are getting down to the point where they represent reasonable value, and maybe it’s time to give another look at some of the names in the energy sector,” Hutcheon added.
Editing by Peter Galloway