Canada's main stock index fell 1 percent on Friday as investors held on to concerns raised by the US Federal Reserve about global economic growth and sell-offs in the prices of copper and oil weighed on resource shares. Commodity prices have been under pressure in the past few weeks and market volatility has been on the rise due to questions about China's economic growth.
After hitting a two-week high in the previous session, the benchmark Canadian index moved sharply lower, reflecting its exposure to oil and copper stocks. Global economic risks and concern about inflationary pressure prompted the Fed to push back its plans to raise interest rates. "There's enough to suggest that they are still on track to raise rates this year," said Colin Cieszynski, chief market strategist at CMC Markets. "But people are worried, 'If you're not raising rates, it must be really bad'."
He said it is a negative phase for equities "between the falling oil price and the seasonality and the talk from the Fed." "There's potential over the next month or so that we could see weakness in the markets while this sorts itself out," he said. The Toronto Stock Exchange's S&P/TSX composite index closed down 140.26 points, or 1.02 percent, at 13,646.90. Six of the 10 main sectors on the index were in the red.
The energy sector slumped 2.2 percent. Suncor Energy Inc dropped 3.1 percent to C$34.05, and Canadian Natural Resources Ltd declined 3.6 percent to C$26.95. In the mining sector, First Quantum Minerals Ltd fell 8.4 percent to C$6.95 and Teck Resources Ltd lost 6.8 percent to C$8.12. Financials, the index's most heavily weighted sector, slipped 1.6 percent. Bank of Nova Scotia gave back 1.8 percent to C$58.10.
Comments
Comments are closed.