Canada's benchmark stock index slumped on Friday, dropping by the most in over five months in a sharp pullback from a record high set earlier in the week, as heavily-weighted energy and financial stocks led a broad-based retreat. The Toronto Stock Exchange's S&P/TSX composite index ended down 247.73 points, or 1.57 percent, at 15,533.47, its sharpest one-day loss since September 13. All of the index's 10 main industry groups finished in the red, with the energy and financials groups - which account for 55 percent of the index's weight - down 3.2 percent and 1.4 percent, respectively.
Investors struggled to explain the severity of the declines, which contrasted with small gains on Wall Street, but also did not express surprise or concern. "When you look at the run we've had, you've going to see a day like today, it's inevitable," said Allan Small, a senior investment advisor at HollisWealth Inc. "We'll need a few days of this in a row for me to think there's been a change in the momentum," he added.
Royal Bank of Canada shares dropped 1.7 percent to C$96.61 despite beating forecasts with its first quarterly earnings of more than C$3 billion. Other heavyweight bank stocks fell by similar degrees. Suncor Energy Inc, Canada's largest oil and gas producer, fell 3.8 percent to C$41.24.
Oil prices fell about 1 percent as worries about rising US supplies outweighed Opec pledges to boost compliance with curbs on production. Husky Energy Inc shed 5.5 percent to C$15.50 even as the oil and gas producer reported a smaller-than-expected quarterly loss excluding one-time items. The company is mulling paring down its stakes in some of its eastern Canadian offshore assets, in a move that could fetch several billion dollars, people familiar with the talks told Reuters.
Auto parts maker Magna International Inc tumbled 4.7 percent to C$56.43 after its profit missed estimates and it warned that a proposed US border tax could hurt its operations and profitability. Shares in MacDonald Dettwiler and Associates Ltd tumbled 7.3 percent to C$63.96 after the company said it would buy US-based DigitalGlobe Inc for about C$3.1 billion to strengthen its position in the satellite imagery market.
The materials group, which includes precious and base metal miners and fertilizer companies, fell 1.4 percent, even as gold climbed to its highest in 3-1/2 months. Canada's annual inflation rate jumped to a stronger-than-expected 2.1 percent in January, its highest in more than two years.