TORONTO (Reuters) - Canada’s main stock index notched its lowest close in seven weeks on Monday, as the fallout from Britain’s vote to leave the European Union pummeled financial stocks and energy shares fell with retreating oil prices.
The heavyweight financials sector fell 2.1 percent, to its weakest since early April, as uncertainty over London’s position as a global financial hub weighed and investors sought to calculate the likely hit to global economic growth.
Oil prices plunged about 2 percent amid a rallying dollar and market uncertainty in the aftermath of Thursday’s vote, while Canadian banks fell in sympathy with European peers.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 202.09 points, or 1.45 percent, at 13,689.79, its weakest close since May 9. Seven of its 10 main industry sectors fell, with three decliners for every gainer.
Offsetting the declines was a string of gold miners, as bullion maintained a two-year high hit on Friday.
“The (gold) equities are not overvalued, and we also view the commodity as having a lot more room to run,” said James Winckler, research associate at MacNicol and Associates Asset Management.
He added that Brexit should not fundamentally alter the investment thesis for energy companies, which have recovered some of their sharp losses along with crude since early 2016.
“If you were bullish on a turnaround in oil, it shouldn’t have changed your perspective,” he said.
Four of the five most influential declines on the index were financial stocks, with Royal Bank of Canada RY.TO down 2.6 percent to C$75.20 and insurer Manulife Financial Corp MFC.TO off 5.1 percent to C$16.47.
Car parts manufacturers Magna International Inc MG.TO shed 6.4 percent to C$44. Magna has nine manufacturing facilities in England and plans for another.
Meanwhile Fairfax Financial Holdings Ltd FFH.TO, expected to perform well in an economic downturn given its bets on low growth and low rates, added 1.9 percent to C$677.80. It also bucked the falling financial services trend on Friday.
The energy group retreated 2.7 percent, while industrials fell 1.6 percent and technology stocks lost 2.7 percent.
The materials group, which includes precious and base metals miners and fertilizer companies, was marginally lower.
Reporting by Alastair Sharp; Editing by Phil Berlowitz
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