TORONTO: Canada's main stock index slipped on Wednesday after comments by the US Federal Reserve that it could begin rolling back its stimulus program this year weighed on investor sentiment and caused declines across most sectors.
Fed Chairman Ben Bernanke said the US central bank expects to slow the pace of its bond purchases later this year and bring them to a halt around mid-2014.
Financial shares took the biggest toll on the market, while the gold-mining sector posted the sharpest decline, falling with the price of bullion.
The mood was further dented as smartphone maker BlackBerry fell 3.6 percent after a brokerage downgraded its shares.
"That was not what I would call a 'shock and awe' kind of announcement," Michael Sprung, president of Sprung Investment Management, said of the Fed's intention to reduce its bond purchases. "But perhaps people were looking for a bit longer run-time."
"The rates will likely go up," he added. "The markets are going to be concerned about how much of a break that will be on the economy."
The Toronto Stock Exchange's S&P/TSX composite index closed down 99.17 points, or 0.80 percent, at 12,268.29.
The Canadian market is in negative territory for the year.
For the TSX to take off, investors would need to see a rebound in commodity prices, as well as increasing signs of growth in China and other parts of Asia, said Julie Brough, vice president at Morgan Meighen & Associates.
"That's what Toronto is waiting for," she said. "You need that extra bit of momentum to lift the resource stocks."
In a Reuters poll released this week, analysts forecast the resource-heavy Toronto stock index, which has struggled to gain traction in 2013, would kick into gear in the second half of the year as the global economy rebounds.
Seven of the 10 main sectors on the index were in the red on Wednesday.
Financials, the index's most heavily weighted sector, gave back 0.5 percent. Royal Bank of Canada, the country's biggest lender, declined 0.8 percent to C$60.69 and was one of the most influential influences on the index.
BlackBerry's stumble, to C$14.58, caused the information technology sector to fall 0.8 percent.
Energy shares lost 0.5 as a decline in the price of oil also weighed. Enbridge Inc gave back 2.1 percent to C$44.77, and Suncor Energy Inc fell 0.8 percent to C$31.51.
Imperial Oil Ltd said that it was unable to find a buyer for its refinery in Dartmouth, Nova Scotia, and will instead convert the facility into a terminal operation. The stock was up 0.3 percent at C$40.63.
Comments
Comments are closed.