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CANADA STOCKS-TSX sinks as global sentiment, China drags on commodities
August 12, 2015 / 3:45 PM / 2 years ago

CANADA STOCKS-TSX sinks as global sentiment, China drags on commodities

(Updates throughout with market reaction, analyst comment, new details)

* TSX down 214.66 points, or 1.49 percent, to 14,200.01

* Nine of the TSX’s 10 main groups fell

By Solarina Ho

TORONTO, Aug 12 (Reuters) - Canada’s main stock index dropped almost 1.5 percent on Wednesday, tracking markets around the world hit by the latest move from China that allowed the yuan to weaken further.

Crude oil prices were steady following Tuesday’s rout but still flirted with multi-year lows while base metals sank to six-year lows on worries that demand from China, the world’s top metals buyer, would wane.

The resource-heavy Toronto stocks have been hit hard by negative global sentiment that has battered commodity prices.

“I don’t attribute it as much as other people do only to the Chinese trying to reduce the value of their currency against the U.S. dollar,” said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates.

“World economic growth has been slowing and markets have been ignoring that and now they’re catching up with reality.”

The heavily weighted financial stocks dominated the index’s losses, with Royal Bank of Canada among the most influential decliners. RBC fell 1.8 percent to C$75.24. The overall financials group retreated 1.7 percent.

At 11:23 a.m. ET (1523 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 214.66 points, or 1.49 percent, to 14,200.01.

Of the index’s 10 main groups, nine were in the red, with tech, consumer discretionary, health care and industrials all seeing sharp declines of more than 2 and 3 percent. Declining issues outnumbered advancing ones on the TSX for a 3.29-to-1 ratio on the downside.

“It’s hard to say when sentiment will change. We’re somewhere in the bottoming process,” said Kumar, who expects market sentiment to change toward the end of the year into next year.

The materials group, home to mining firms, was the lone gainer, rising 1.3 percent, as strong gold mining shares were buoyed by the higher price of bullion, a safe-haven. Most of the index’s top gainers were all gold miners.

Goldcorp Inc advanced 4.0 percent to C$19.74, while Agnico Eagle Mines Ltd surged 7.1 percent to C$33.31. Gold futures rose 1.3 percent to $1,122 an ounce.

Energy stocks reversed earlier gains to slide 1.3 percent.

Enbridge Inc shares were down 1.1 percent at C$55.04, hurt by a U.S. Midwest pipeline shutdown following a small leak late on Tuesday.

Air Canada shares fell 6.7 percent to C$12.03 after Canada’s biggest carrier said a closely watched revenue number declined. (Reporting by Solarina Ho; Editing by James Dalgleish)

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