TSX falls to a one-month low as energy, financials retreat

TORONTO (Reuters) - Canada’s main stock index fell to a one-month low on Thursday as lower oil prices weighed on energy stocks, while financials and consumer discretionary stocks also lost ground as investor appetite for risk waned globally.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

The index has rallied nearly 15 percent after hitting an almost 3-1/2-year low in January, but has been unable to sustain moves since mid-March above its 200-day moving average as a rally in commodity prices lost momentum.

“What we are seeing recently is the oil price dictating where the overall market goes in the short term,” said Cavan Yie, senior equity analyst at Manulife Asset Management.

U.S. crude CLc1 prices settled at $37.26 a barrel, down 1.3 percent.

“You are seeing the energy sector leading the charge down, banks are following and then you got some large consumer names that are down as well,” Yie added.

The most-influential movers on the index included Toronto-Dominion Bank TD.TO, which fell 1.4 percent to C$54.16, and Manulife Financial Corp MFC.TO, which declined 5.3 percent to C$17.09.

The overall financials group declined 1.3 percent.

The energy group retreated 1.2 percent, including a 1.8 percent drop in the shares of Canadian Natural Resources Ltd CNQ.TO to C$34.37.

Magna International Inc MG.TO dropped 3.6 percent to C$51.88, while the overall consumer discretionary group was down 1.4 percent.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 81.02 points, or 0.61 percent, at 13,266.44. Six of the index's 10 main groups ended lower.

The index touched its lowest since March 4 at 13,217.17.

Quarterly earnings are seen as the next catalyst for the market. Earnings will need to improve if the index is to move higher, said Yie.

Materials and healthcare were among the sectors that advanced.

The materials group, which includes precious and base metals miners and fertilizer companies, added near 1 percent.

Barrick Gold Corp ABX.TO rallied 4.5 percent to C$19.11, while Kinross Gold Corp K.TO was up 6.6 percent at C$4.98.

Spot gold XAU= jumped 1.5 percent amid uncertainty around future U.S. interest rates increases, while a drop in global shares rekindled investor appetite for safer assets.

The shares of Valeant Pharmaceuticals International Inc VRX.TO rose 4.3 percent to C$46.70. The company said its lenders had agreed to give it an extra month to file its annual report, providing further reassurance to investors as the company attempts to win back their confidence.

Reporting by Fergal Smith; Editing by Jonathan Oatis and Alan Crosby