October 19, 2015 / 11:41 AM / in 2 years

Slumping oil, China worries hit TSX's resource stocks

TORONTO (Reuters) - Canada’s main stock index fell on Monday as slumping oil prices and worries over slowing Chinese demand hurt energy stocks and miners, while investors largely shrugged off political risk from a federal election that could lead to a change in government.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Oil fell about 4 percent, and the influential energy group on Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE followed it down 3 percent.

The materials group, which included miners, lost 2.2 percent and healthcare also slipped.

But the seven other main groups all rose, as the index closed down 79.72 points, or 0.58 percent, at 13,758.38. That was its lowest close in almost two weeks.

The most influential mover on the index was Valeant Pharmaceutical International Inc VRX.TO, which fell 4.7 percent to C$216.75. The company, facing heavy criticism for sharply increasing the prices of drugs it acquired, said the pace of those price hikes would moderate.

“The fact that the domestic components are up, outside of certain idiosyncratic areas such as healthcare, suggests that people aren’t that worried about the election,” said John Johnston, chief strategy officer at Davis-Rea.

Canadian voters may oust Conservative Prime Minister Stephen Harper’s government, polls suggest, amid a late surge by Liberal rival Justin Trudeau.

Johnston said the most likely scenarios from the vote, whose results are expected later on Monday night, would not change his dim view on Canadian equities.

“I‘m kind of pessimistic on Canadian growth, I think interest rates stay low, the Canadian dollar’s going to be weak and the stock market will underperform over the next several years,” he said.

Among oil names, the biggest weights included Suncor Energy Inc SU.TO, down 1.4 percent to C$36.36, and Canadian Natural Resources CNQ.TO, off 2.1 percent to C$30.28.

Mining stocks pulled back as concerns about sluggish Chinese growth weighed on prices for copper and steel.

China’s economy grew at the slowest pace in six years in the third quarter, according to official data released on Monday.

First Quantum Minerals Ltd FM.TO lost 9.1 percent to C$6.83, and Goldcorp Inc G.TO shed 2.5 percent to C$19.28.

Gold futures GCc1 fell 0.9 percent to $1,169.3 an ounce. Copper prices CMCU3 declined 1.5 percent to $5,206 a ton.

Reporting by Alastair Sharp; Editing by Bernadette Baum and Diane Craft

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