TORONTO (Reuters) - Canada’s main stock index closed sharply lower on Monday, in a broad-based rout led by a massive plunge in gold mining and energy shares, hurt by a sharp retreat in commodity prices.
Gold plunged more than 4 percent to five-year lows as sellers in New York and China, a top consumer, dumped the precious metal. With the greenback strengthening ahead of an expected interest rate hike by the Federal Reserve this year, investors have been moving away from holding safe-haven gold.
Meanwhile, U.S. crude sank below $50 a barrel, as a rallying greenback and signs of ample supply pressured the commodity.
The biggest drags on the index were gold miners, with more than a dozen gold names seeing double digit percentage drops.
Barrick Gold Corp ABX.TO topped the list, plunging nearly 16 percent to C$9.58, and Goldcorp Inc G.TO diving 12.4 percent to C$16.74.
The overall materials group, home to mining companies, tumbled 6.3 percent to its lowest since the financial crisis in December 2008. The S&P/TSX Global Gold index .SPTTGD plunged 11.2 percent.
Energy stocks followed close behind, falling 3.3 percent. Canadian Natural Resources CNQ.TO ended down 4 percent to C$31.47 and Enbridge Inc ENB.TO finished down 2.2 percent to C$58.25.
“With the U.S. dollar continuing to move upward, with China’s deceleration in growth, I just don’t think that there is the catalyst for gold and energy and other resources to rebound anytime soon,” said Stan Wong, Director of Wealth Management & Portfolio Manager at ScotiaMcLeod.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished down 217.29 points, or 1.48 percent, at 14,425.55.
Nine of the index’s 10 main sectors lost ground. Declining issues outnumbered advancing ones on the TSX by 214 to 30, for a 7.13-to-1 ratio on the downside. The index was posting 10 new 52-week highs and 39 new lows.
“We’re having a relapse. I‘m hopeful this is a reaction to the good week we had last week, and we’ll have a couple of soft days and then it will get better,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
Spot gold prices fell 2.8 percent at $1,102.05 an ounce by 3:54 p.m. EDT, down for the sixth straight session, after falling as far as $1,088.05 an ounce, the lowest since March 2010.
U.S. August crude CLc1, set to expire on Tuesday, fell 74 cents to settle at $50.15 a barrel, having fallen to $49.85, its first time below $50 since April.
Reporting by Solarina Ho; Additional reporting by Alastair Sharp; Editing by James Dalgleish and Chris Reese