TORONTO (Reuters) - Canada’s main stock index finished lower on Monday as energy issues fell in tandem with oil prices after G20 officials warned about the risks to global growth from the rising cost of crude.
Energy issues, which represent some 20 percent of the Toronto index, dropped 1.2 percent as oil prices pulled back after a string of higher settlements. <O/R> [ID:nL2E8DQ1OA] Suncor Energy SU.TO fell 2.2 percent to C$36.16, while Nexen NYX.TO sank 2.9 percent to C$20.56.
The sector was pressured in part by comments by the Group of 20 finance ministers and central bankers on Sunday. They said they were “alert to the risks of higher oil prices” and discussed at length the impact that sanctions on Iran would have on crude supplies and global growth.
“The fact that you now have crude oil prices in the triple digits that’s causing some concern about the impact high oil prices might have on the world economy,” said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver.
“Renewed concern about global growth is offsetting any risk premium from the situation from the Middle East, specifically Iran.”
Higher prices at the gas pump could undercut the U.S. economic recovery, push Europe deeper into recession and stoke already-high inflation in many emerging economies.
One of the worst performing stocks in the energy sector and the broader index included Petrominerales Ltd PMG.TO, which tumbled 19.6 percent to C$19.05, after it said initial results from a test well in Colombia fell short of expectations and the oil and gas producer failed to replace its depleted reserves.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the day down 25.39 points, or 0.2 percent, at 12,700.38. Five of its 10 main sectors were lower.
The blue chip S&P/TSX 60 index .TSE60 closed 0.73 of a point lower at 722.63.
Also weighing on the broader index were materials issues, down 0.6 percent.
Barrick Gold ABX.TO slid 0.3 percent to C$48.54 as the gold market took a breather after last week’s sharp gains. <GOL/> Fertilizer company Potash Corp POT.TO dropped 0.4 percent to C$46.40.
Investor sentiment remained cautious amid ongoing concerns about Europe’s financial stability and its impact on the global economy, said Julie Brough, vice-president at Morgan Meighen & Associates.
“I think you saw a hint of pessimism coming back today and pushing down these commodity prices with the expectation of lower growth,” she said.
Up the upside, shares of Valeant Pharmaceuticals International VRX.TO rose 5.6 percent to C$50.71 after the company posted a quarterly profit on Monday as acquisitions and growth in its dermatology business boosted revenue.
Editing by Rob Wilson