TORONTO, Dec 30 (Reuters) - Canada’s main stock index fell on Tuesday, hurt by financial and energy stocks as risk aversion swept through global markets and oil touched its lowest point in more than five years.
The move was partially offset by gains in the materials sector as gold rose.
Risk aversion has been weighing on Canadian banks, despite their strong yields, said Bryden Teich, an associate at Avenue Investment Management in Toronto.
“A lot of the quality names like the Canadian banks have been hit recently, but we definitely feel it’s been unwarranted,” he said. “The fact is, they’re still great businesses, they’re still making a lot of money.”
He saw more headwinds for energy shares, noting that the stocks hit hardest through recent oil price declines are those of companies that have announced spending cuts, and more announcements could be coming.
“There’s still a lot of fallout from prices at these levels, in terms of who’s going to be producing what,” he said.
U.S. crude edged higher on Tuesday, but only after touching its lowest point since May 2009. Oil markets have been heavily oversupplied this year thanks to U.S. shale production and lower-than-expected consumption.
The Toronto Stock Exchange’s S&P/TSX composite index was down 41.2 points, or 0.3 percent, at 14,622.70.
The Bank of Nova Scotia played the biggest role in pulling the index lower, dropping 0.9 percent to C$66.35. Suncor Energy Inc was also a drag on the index as it fell 1.0 percent to C$37.03.
Overall, the financial sector fell 0.6 percent while energy stocks dropped 1.1 percent.
On the upside, miner Goldcorp Inc jumped 4.4 percent to C$21.57, and rival Barrick Gold Corp was up 3.5 percent at C$12.61. Gold stocks jumped 3.8 percent, lifting the broader materials sector. (Editing by Nick Zieminski)
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