(Adds analyst’s comment, market developments)
* TSX down 26.26 points, or 0.18 percent, to 14,225.27
* Seven of the TSX’s 10 main groups fell
By Solarina Ho
TORONTO, Aug 18 (Reuters) - Canada’s main stock index dropped on Tuesday with most of its sectors under pressure as market sentiment around the world took a hit from a 6 percent plunge in Chinese shares, which helped push commodity prices to multiyear lows.
China’s currency also weakened against the greenback, sparking fears that a deeper devaluation of the yuan may lie ahead.
“Usually the last couple of weeks of August are pretty quiet. This year, there’s a lot of going on,” said Bryden Teich, associate portfolio manager at Avenue Investment Management.
“The continuation of a selloff for all commodities is something that’s also lingered on. It’s a period of pain for a lot of the commodity industries and producers.”
Energy shares on the Toronto market have been hit particularly hard this year with oil prices dropping to near 6-1/2 year lows. Teich said there is still too much crude supply globally and that it is impossible to predict when oil prices will bottom.
At 11:22 a.m. EDT (1522 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 26.26 points, or 0.18 percent, at 14,225.27.
Of the index’s 10 main groups, seven were in negative territory. Declining issues outnumbered advancers by 142 to 99, for a 1.43-to-1 ratio on the downside. The index was posting two new 52-week highs and 19 new lows.
The most influential decliners on the index included pipeline operator Enbridge Inc, which fell 1.5 percent to C$55.05, and Barrick Gold Corp, which sank 3.4 percent to C$9.95. First Quantum Minerals Ltd plunged 6.4 percent to C$7.93.
Overall, energy stocks retreated 0.1 percent, while the materials sector, home to mining names, retreated 1.1 percent.
Investors were keeping an eye on the impact of a strong greenback on corporate profits and the U.S. economy. They were also waiting to see if the Federal Reserve’s latest minutes, to be released on Wednesday, will provide clues on when the central bank might start raising interest rates, a move that some see coming as early as September.
“It’s definitely come to the point where they need to at least raise rates away from crisis-level interest rates,” Teich said. “It signals confidence in the economy.”
In corporate news, Brookfield Asset Management said on Monday it is buying Australian port and rail freight firm Asciano for $6.6 billion to form a global logistics company. Brookfield shares were off 0.5 percent at C$44.92. The overall financials sector was off 0.1 percent.
$1=$1.31 Canadian Reporting by Solarina Ho; Editing by Peter Galloway