TORONTO (Reuters) - Canada’s main stock index fell on Wednesday as China’s currency weakened further, but pared its sharpest losses as oil prices bounced off six-year lows.
Losses were heaviest among banks, fertilizer producers and some energy stocks.
Crude oil prices LCOc1 CLc1 rose following Tuesday’s rout, while base metals CMCU3 sank to six-year lows on worries demand from China, the world’s top metals buyer, would wane. [MET/L][O/R]
The resource-heavy Toronto market has been hit hard by negative global sentiment that has battered commodity prices.
The latest monetary move in China, which the People’s Bank of China says should mean the yuan better reflects market prices, is likely to maintain the pressure.
“I don’t see how it can be positive for commodities,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. “It just shows that they are concerned about the health of their economy.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE lost 75.14 points, or 0.52 percent, at 14,339.53. Of the index’s 10 main groups, seven ended lower.
Shares in fertilizer companies Potash Corp POT.TO and Agrium Inc AGU.TO moved lower after a U.S. government report showed harvests yielded more than expected, weighing heavily on corn and soybean futures.
Potash lost 2.1 percent to C$33.90 and Agrium fell 2.5 percent to C$131.91.
Major banks also figured prominently in the index’s losses, with Royal Bank of Canada (RY.TO) down 1 percent at C$75.84. The overall financials group retreated 0.9 percent.
“World economic growth has been slowing and markets have been ignoring that and now they’re catching up with reality,” said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates.
“It’s hard to say when sentiment will change. We’re somewhere in the bottoming process,” said Kumar, who expects a pickup later this year or early in 2016.
The materials group, home to mining firms, rose 1.7 percent, as gold miners were buoyed by the higher price of bullion, a safe-haven. Most of the index’s top gainers were gold miners.
Goldcorp Inc (G.TO) advanced 4.2 percent to C$19.78, while Agnico Eagle Mines Ltd (AEM.TO) surged 7.8 percent to C$33.51 and Barrick Gold Corp (ABX.TO) gained 4.2 percent to C$10.55. Gold futures GCc1 rose 1.4 percent to $1,123.20 an ounce. [GOL/]
Air Canada (AC.TO) shares fell 6.4 percent to C$12.08 after Canada’s biggest carrier said a closely watched revenue number declined.
Additional reporting by Solarina Ho; Editing by James Dalgleish and Lisa Shumaker