(Adds analyst comment, details on China, market reaction)
* TSX down 186.91 points, or 1.29 percent, at 14,279.48
* All 10 of the TSX’s main groups drop
By Solarina Ho
TORONTO, Aug 11 (Reuters) - Canada’s resource-laden main stock index sank more than 1 percent on Tuesday, reversing the previous session’s bounce, as oil and mining stocks were hit by a rout in commodity prices following China’s unexpected move to devalue its currency.
The People’s Bank of China devalued the yuan by nearly 2 percent overnight in China’s latest attempt to bolster its economy following a string of poor economic data.
Prices for copper and U.S. crude tumbled 4 percent or more, with oil approaching multi-year lows and copper hitting six-year lows on concern that the cheaper yuan will make importing commodities more expensive for China, which is among the world’s top consumers of resources.
Energy stocks were down 2.8 percent, while materials, which include miners, were down 1.3 percent.
Petroleum producer Canadian Natural Resources fell 2.1 percent to C$32.45, while Suncor Energy Inc declined 1.4 percent to C$37.17.
“China’s probably going to have a 5 or 6 percent growth rate. It’s a managed economy. It’s not your free enterprise economy, and they will get their growth one way or another,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management, who is not expecting any major spillover effect.
“I just don’t see a huge impact. It’s too far away ... It’s probably wise on their part to do that if they want to keep (their economic growth) at 5 or 6 percent.”
Over the longer term, Dollarama Inc and other retailers that import from China could profit from a cheaper yuan.
At 11:52 a.m. EDT (1552 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 186.91 points, or 1.29 percent, at 14,279.48.
All 10 of the index’s main sectors were in negative territory. Declining issues outnumbered advancers by a 5.23-to-1 ratio.
Volatility will remain part of the current market pattern, said Cockfield, who expressed overall optimism that economic fundamentals are solid and that Canada will be helped by a robust U.S. economy, even as oil continues to struggle.
Other top decliners included Toronto-Dominion Bank, which fell 1.7 percent to C$52.37, and Royal Bank of Canada , which was down 1.6 percent a C$76.06. The financial group was off 1.4 percent. The financial, energy and materials groups together make up roughly a third of the index’s weight.
Bucking the trend were gold miners, many of which benefited from a safe-haven rebound in bullion prices following the yuan move.
$1=$1.31 Canadian Reporting by Solarina Ho; Editing by Peter Galloway