TORONTO (Reuters) - Canada’s main stock index fell 1.3 percent on Wednesday, managing to pare some losses after plunging to an almost 3-1/2 year low as a rout in oil prices rumbled on and the Bank of Canada deciding against cutting rates.
The index had fallen nearly 4 percent earlier as energy and financial shares weighed heavily, with some seeing a good omen in the afternoon buying interest.
“I think we’re getting to the end of the hysteria,” said Rick Hutcheon, president and chief operating officer at RKH Investments. “Chances are we’re getting to the point where the bulk of the damage has been done.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 159.13 points, or 1.33 percent, to 11,843.11. It had slumped as low as 11,531.22, its lowest level since Aug. 3, 2012.
Nine of the index’s 10 main groups fell, with the materials group bucking the trend helped by rising gold miners.
Banks and other financial stocks fell 1.8 percent, with Royal Bank of Canada (RY.TO) down 2.7 percent to C$65.62 and Bank of Nova Scotia (BNS.TO) off 2.6 percent at C$51.87. Insurer Manulife Financial Corp (MFC.TO) fell 1.6 percent to C$17.75.
Energy stocks lost 1.3 percent, while industrial stocks fell 1.4 percent.
“Now’s a time to hold firm,” said John Stephenson, president at Stephenson & Company Capital Management. “I think it’s getting close to the time to double down, if you will, on better bets, but I’d like to see truthfully more of a capitulation out there.”
He said the index could fall another 3 percent to 5 percent before valuations start to entice investors back in.
The Bank of Canada held rates steady rather than cutting despite lower growth, opting for patience because of expected help from a weak currency, past rate cuts, fiscal stimulus and U.S. strength.
Reporting by Alastair Sharp; Editing by Nick Zieminski and Lisa Shumaker