OTTAWA, July 8 (Reuters) - Canada’s main stock index dropped more than 1 percent on Wednesday, caught up in broader risk aversion prompted by a sell-off in equities in China.
The declines on Bay Street were widespread and included traditional safe havens such as financials, healthcare and consumer discretionary stocks that had found favor with investors last week.
The energy sector was the biggest drag, shedding nearly 2 percent as U.S. crude oil prices fell. Shares of gold companies were among the few gainers and helped to cap declines on the broader index early in the session as gold prices edged up.
But the TSX extended its losses as the morning wore on, unable to overcome the global flight to safety after China’s stock market resumed its rout, raising concerns that the turmoil will destabilize China’s economy.
The volatility in China exacerbated nervousness over whether Europe would step in to keep Greece in the euro zone. The country’s prime minister pleaded in the European Parliament for a fair deal for Greece.
“It’s still Greece and China all over the headlines and what those implications are,” said Paul Hand, managing director at RBC Capital Markets in Toronto.
“Canada is kind of a bystander in all this, collateral damage in the sense that we are impacted by the global economy.”
At 10:34 a.m. ET (1434 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 155.88 points, or 1.07 percent, at 14,468.62. All of the index’s 10 main groups were in negative territory.
The heavyweight financial sector retreated 1.0 percent with Toronto Dominion down 1.20 percent at C$52.275. Royal Bank of Canada fell 0.95 percent to C$75.72.
The gold miners sub-index climbed 0.8 percent while the materials sector gave up early gains to fall 0.5 percent.
Goldcorp shares rose 2.0 percent to C$21.53 and Barrick Gold rose 0.5 percent to C$13.16. Gold futures rose 0.6 percent to $1,159.2 an ounce.
Declining issues outnumbered advancing ones on the TSX by 202 to 40, for a 5.05-to-1 ratio on the downside. (Reporting by Leah Schnurr; Editing by James Dalgleish)