TORONTO (Reuters) - A capitulation in heavyweight energy stocks pummeled Canada’s main stock index on Wednesday, pushing it down 1.1 percent as crude oil prices plumbed new depths after a shock rise in U.S. stockpiles.
The energy group sank 4.3 percent, knocking it to its lowest since August 2004, in line with a similar fall in the commodity after the U.S. inventories numbers reinforced concerns about a global supply glut. [O/R]
“There’s quite a bit of panic in the energy sector right now,” said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP Ltd.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 157.24 points, at 14,036.63. There were three decliners for every advancing stock.
Canadian Natural Resources Ltd (CNQ.TO), the country’s largest independent petroleum producer, lost 5.6 percent to C$28.30 and Suncor Energy Inc (SU.TO), Canada’s largest oil and gas company, fell 3.2 percent to C$35.16.
Ten smaller operators gave up between 7 and 15 percent of their market value.
Zohny said that for investors with a three-to-five-year horizon, some names could be considered buying opportunities at these levels.
“There’s quite a bit of bad news priced into the sector and there could still be some short-term pain, but it’s definitely starting to look more attractive,” he said.
A slip in the influential financials group also contributed to the index’s slide, its eighth in 10 sessions.
The financials are being tested by a combination of factors, said Philip Petursson from the portfolio advisory group at Manulife Asset Management, including banks’ ties to commodities-related companies and the low interest-rate environment.
Investors will be closely watching bank earnings next week, Richardson GMP’s Zohny said, and negative reports could push the index below 14,000.
Gold miners featured heavily among the most influential gainers, propped up by higher prices for the safe-haven precious metal. [GOL/]
Goldcorp Inc G.TO rose 2.9 percent to C$19.85 and Barrick Gold Corp (ABX.TO) added 3.7 percent to C$10.34.
Reporting by Alastair Sharp; Editing by Peter Galloway and James Dalgleish