(Adds market developments, analyst’s comments)
* TSX down 162.58 points, or 1.15 percent, to 14,031.29
* Nine of the TSX’s 10 main groups lower
By Solarina Ho
TORONTO, Aug 19 (Reuters) - Canada’s main stock index fell more than 1 percent on Wednesday with financial and energy shares suffering heavy losses as oil prices sank on rising U.S. inventories while concern about China’s economy continued to rattle the market.
The index’s slide, its eighth in 10 sessions, tracked falls on stock markets around the world. U.S. indexes were also down by about 1 percent.
“Canada’s a victim of the rest of the world ... Certainly oil hitting new lows is not good for our market,” said Philip Petursson, managing director, capital markets and strategy, at the portfolio advisory group at Manulife Asset Management.
Crude prices sank to nearly 6-1/2-year lows after U.S. data showed an unexpected rise in stockpiles. U.S. crude prices were down 3.8 percent at $41 a barrel late on Wednesday morning.
About half of the weight of the Toronto stock market’s key index is comprised of financial and energy names. This does not bode well for the market, Petursson said, noting that a combination of factors were hurting financial stocks, including banks’ ties to commodities-related companies and the low interest rate environment.
About three-quarters of the index’s top 20 decliners were energy and financial names. Oil and gas shares sank 3.7 percent, while financials retreated 1.1 percent.
Bank of Nova Scotia fell 1.8 percent to C$59.55. Among oil companies, Suncor Energy Inc was down 2.8 percent at C$35.32, and Canadian Natural Resources dropped 4.2 percent to C$28.72.
Still, Petursson noted that energy company shares have held up better than oil itself, but warned that could be a lag effect and that another round of cost cuts could lie ahead, further hurting the energy sector.
At 11:32 a.m. EDT (1532 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 162.58 points, or 1.15 percent, at 14,031.29.
Nine of the index’s 10 main groups lost ground, with declining issues outnumbering advancers by 202 to 43, for a 4.70-to-1 ratio on the downside. The index was posting three new 52-week highs and 30 new lows.
“This effort by China (to devalue the yuan), we see it as an act to help support the export market at a time when the major developed economies are competing for exports. But who’s doing the buying?” Petursson said. “Overall, that will weigh on commodities and weigh on the Canadian market going into next year.”
Materials, home to gold-mining companies, was the lone gaining sector, propped up by higher prices for the safe-haven precious metal.
Goldcorp Inc led the top 20 gainers, most of which were gold miners. Goldcorp jumped 4.2 percent to C$20.09.
$1=$1.32 Canadian Reporting by Solarina Ho; Editing by Peter Galloway