TSX falls as lower oil prices, weak retail sales data weigh

TORONTO (Reuters) - Canada’s main stock index fell on Friday, led by a drop in health care, energy and financial sector stocks, as crude oil prices tumbled and domestic retail sales disappointed.

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

The health care group fell 3.7 percent. It included a 9.6 percent slide in the shares of Valeant Pharmaceuticals International Inc VRX.TO to C$117.00.

The energy group retreated 1.7 percent while the heavyweight financials group fell 0.5 percent, as domestic data showed signs of slowing consumer demand and growing inflationary pressures.

Signs of weaker economic growth has joined uncertainty related to energy loan books and an “overheated housing market,” adding to investor concerns about bank stocks, according to Diana Avigdor, head of trading at Barometer Capital Management.

Banks begin to report quarterly earnings next week.

The concern is that each time they don’t show deterioration in performance they are “pushing out the inevitable,” said Avigdor.

Oil prices fell as record high U.S. crude stockpiles intensified worries that a plan to freeze world output will do little or nothing to reduce massive supplies already in the market. [O/R]

U.S. crude CLc1 prices settled at $29.64 a barrel, down 3.67 percent.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 117.96 points, or 0.91 percent, at 12,813.40. Eight of the index's 10 main groups ended lower.

Still, the index posted a 3.5 percent gain on the holiday-shortened week.

The market needs the long-term investor to get engaged in order to take it to the next level, said Avigdor.

The most influential movers on the index also included Canadian Natural Resources CNQ.TO, which fell 3.5 percent to C$28.09, and Manulife Financial Corp MFC.TO which lost 2.5 percent to C$17.55.

Pipeline company Enbridge Inc ENB.TO fell 2.1 percent to C$43.14, despite reporting higher-than-expected profit.

The materials group, which includes precious and base metals miners and fertilizer companies, fell 1.7 percent. It included a 6.6 percent drop in the shares of Potash Corporation of Saskatchewan Inc POT.TO to C$22.06.

Retail sales slumped in December as unseasonably warm weather in many parts of the country cut into seasonal purchases.

The annual inflation rate picked up to 2 percent in January, the highest since November 2014, lifted by food prices and a rise in gasoline costs.

Consumer discretionary stocks fell 0.7 percent, but staples rose 0.2 percent.

Additional reporting by Alastair Sharp Editing by W Simon