TORONTO (Reuters) - Canada’s main stock index slumped on Wednesday to a 2-1/2-year low as investors used an early rally to reduce exposure to stocks and crude oil prices fluctuated on rising U.S. inventories.
The index had climbed initially after positive Chinese trade data supported sentiment.
“People don’t want stocks these days and they’re taking every opportunity to sell them,” said John Kinsey, portfolio manager at Caldwell Securities.
Heavyweight financial stocks fell 2.1 percent, including a 2.5 percent drop in Royal Bank of Canada (RY.TO) to C$69.15.
Financials are “taking a good hit” amid concern that the impact of the oil price shock will get worse for the banks in 2016, according to Kinsey.
Brent crude fell below $30 a barrel for the first time since April 2004 as growing inventories of oil in the United States stoked market fears about demand.
Bombardier Inc (BBDb.TO) fell 4.1 percent to C$1.17. The company said it was ending a decades-long tie-up with a partner in the Middle East for business jets sales and separately canceling two dozen firm orders for its larger Global business jets.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 203.49 points, or 1.64 percent, to 12,170.41. Eight of the index’s 10 main groups were in negative territory.
Railway stocks were also a drag, including a 2.7 percent drop in Canadian National Railway Co (CNR.TO) to C$72.90.
Among the gainers, Shaw Communications Inc SJRb.TO rose 5.3 percent to C$24.70. The company said it would sell its media unit to Corus Entertainment Inc (CJRb.TO) for C$2.65 billion ($1.9 billion), gaining funding for its Wind Mobile purchase.
Magna International Inc (MG.TO) rose 2.3 percent to C$51.69 after the company said it expected sales in its auto parts manufacturing business to rise about 15.7 percent this year.
The materials group rose 0.2 percent as mining stocks benefited from safe-haven demand for gold.
Spot gold XAU= was up 0.6 percent at $1,093.25.
Reporting by Fergal Smith; Editing by James Dalgleish and Leslie Adler