January 12, 2009 / 4:04 PM / 10 years ago

CANADA STOCKS-Commodities pull TSX down to December level

* Lower oil and gold prices pull down Toronto index

* Index hits lowest level since Dec 31

* Slide extends last week’s 1.6 percent selloff (Adds details and updates prices)

By Frank Pingue

TORONTO, Jan 12 (Reuters) - Toronto’s main stock index was down more than 200 points, hitting its lowest level since Dec 31, on Monday as lower prices for key Canadian commodities such as oil and gold pulled the resource-heavy index down.

The slide extends last week’s selloff, which saw the market finish the week 1.6 percent lower, a drop that was attributed largely to falling oil prices.

Nagging concerns that a global slowdown will crimp prices for oil shook the energy sector again on Monday, while the materials group buckled as prices for gold and other precious metals slid.

“It’s still early in week and there are no economic reports left today so I have a feeling that the big story today will be oil and commodities,” said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

The materials group, home to gold mining shares, suffered the biggest drop, down 5.6 percent, while the energy sector followed with a 3 percent skid. Eight of the TSX’s 10 sectors were down.

At 10:45 a.m. (1545 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 202.45 points, or 2.23 percent, at 8,882.73. Earlier, it had fallen as low as 8,824.25.

Oil prices were down more than $2 to below $39 a barrel due to growing evidence that recession is reducing global energy consumption. The price of oil has shed more than $100 from a record peak of above $147 a barrel last July.

Shares of Canadian Natural Resources (CNQ.TO) were down 3.7 percent at C$48.84, while Suncor Energy (SU.TO) shares fell 4 percent to C$26.74.

Toronto’s energy sector accounts for about 22 percent of the overall index, so any significant moves in oil prices can often dictate the direction of the market.

Gold prices were 3.5 percent lower as the U.S. dollar rallied against the euro on expectations for an interest rate cut in the euro zone later this week.

That was enough to convince jittery investors to unload shares of gold miners and most other stocks as they had less of an appetite for riskier assets ahead of fourth-quarter earnings reports that could spotlight further deterioration in the economy.

Barrick Gold (ABX.TO) shares were 4 percent lower at C$37.63, while Goldcorp (G.TO) sank 5 percent to C$30.70.

$1=$1.20 Canadian Reporting by Frank Pingue; editing by Peter Galloway frank.pingue@thomsonreuters.com ; +1 416 941-8094; Reuters Messaging: frank.pingue.reuters.com@reuters.net

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below