Canada's main stock index ended 1.25 percent lower on Friday as a raid on the Montreal offices of gaming company Amaya Inc weighed on its shares and those of two financial firms also involved in the securities regulator probe. The index, buffeted by plunging oil prices that have hit domestic energy producers hard, lost more than 5 percent on the week, its biggest weeklong slip since September 2011.
Banks were among the heaviest weights on the day, as investors added the third of Canada's biggest sectors to the sell-off hitting energy and materials names after an underwhelming earnings season. "One of the biggest safe havens ... has now become suspect," said Robert McWhirter, chief executive officer of Selective Asset Management. "Even these stocks have the potential to decline."
Insurance company Manulife Financial lost 2.7 percent to C$21.07, and investment bank Canaccord Genuity Group slumped 16 percent to C$6.16 after their offices were raided in connection with the Quebec probe into trading of Amaya's securities. Amaya fell 18.3 percent to C$28.64. The Toronto Stock Exchange's S&P/TSX composite index unofficially ended down 173.22 points at 13,731.90. A 3 percent fall in the already weak price of oil and disappointing Chinese economic data sent energy shares down.
Figures released on Friday showed China's factory output growth slowed more than expected in November and growth in investment neared a 13-year low. Oil's steep descent in recent weeks has raised concerns about the commodity's producers and the broader Canadian equity market, which has a large concentration of energy stocks. The price of US crude oil slipped below $60, and shares of Canadian energy producers are down about 42 percent since the middle of June.
"With the slide in energy, investors have become bearish towards Canada. Eventually that will straighten itself out, but it could take a while," said Colin Cieszynski, chief market strategist at CMC Markets Canada. He said the oil price could go under $50 and expects energy shares to remain under pressure over the next few months. But Adrian Mastracci, a portfolio manager at KCM Wealth Management, said it could be time to seek out energy bargains. "We would buy quality stocks that have been beaten up," he said, including large-cap energy stocks. Shares of Canadian Natural Resources Ltd fell 3.1 percent to C$33.17, and pipeline company Enbridge Inc lost 1.9 percent to C$54.31.
Comments
Comments are closed.