Canadian shares dropped to the lowest level in two months in midday trading on Thursday, stretching this month’s losses, after U.S. Federal Reserve Chairman Ben Bernanke said the central bank of Canada’s largest trading partner could move as early as this year to slow the flow of monetary stimulus to the world’s biggest economy.
The resource-heavy benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) fell 1.6 percent to 12,070.76 at 12:20 p.m. in Toronto. It had retreated as low as 12,057.21, the lowest level since April 18 in earlier trading. Ten shares declined for every stock that advanced. The 237-member gauge has lost 3 percent so far this month.
Bernanke said on Wednesday that the Fed, which buys $85 billion of Treasury and mortgage debt each month, may begin cutting purchases this year and snap the program next year should the U.S. economy continue to improve.
Financials, the main measure's most heavily-weighted sector, retreated 0.9 percent, as all ten sectors fell.
The materials sub-index, which includes mining shares, plummeted 4.4 percent as gold tumbled to a two and a half year low on Bernanke’s remarks. Barrick Gold Corp. (TSE:ABX), the world’s largest gold producer, gave back 8.4 percent to a record low of $16.99. Teck Resources Ltd. (TSE:TCK.B), the nation’s largest diversified miner, shed 1.5 percent to C$22.75. OceanaGold Corp. (TSE:OGC), which mines in New Zealand, dipped 17.5 percent to C$1.18.
Energy, the main index's second most heavily weighted sector, dropped 1.4 percent as oil, Canada’s largest export, slid on Thursday driven by Bernanke’s comments in addition to weak manufacturing-activity figures from China and an increase in U.S. oil supply.
TransGlobe Energy Corp. (TSE:TGL), a Canadian oil producer focused in Egypt, tumbled 9 percent to C$6.52, the lowest price in three years, after trimming its full-year production outlook as the North African country “works through its current macro-economic challenges.” Expected average production for 2013 has been reduced to between 19,000 and 20,000 barrels of oil per day, the Calgary, Alberta-based company said in a statement on Thursday.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) sank 2.6 percent to 899.47, the lowest level in more than a year, stretching this year’s losses to 26.3 percent.
In other corporate news, Rona (TSE:RON)(TSE:RON.PR.A) said Thursday that it has agreed to sell its commercial and professional market division to a subsidiary of EMCO Corp for around $215 million, sending shares of the hardware and home renovation retailer lower.
The home renovation retail chain has been struggling amid increasing competition and the high cost of goods weighing on its bottom line, and said the deal is in line with its priorities that have been focused on unlocking the potential of its retail and distribution business. Shares of Rona were down 0.9 per cent at C$10.15 at last check.
In economic news, the ratio of Canadian household debt to disposable income fell for a second quarter after reaching a record last year, suggesting consumers are heeding warnings about the risks of too much borrowing. Statistics Canada said in Ottawa on Thursday that credit-market debt such as mortgages slid to 161.8 percent of disposable income, compared with a revised 162.6 percent in the prior three-month period. The agency said mortgage borrowing grew at the slowest pace since the 2009 recession.
Also on Thursday, Statistics Canada said the number of Canadians receiving jobless benefits fell 0.5 percent in April from the previous month. It said the number of regular beneficiaries declined by 2,450 to 521,6300. From the year-earlier month, the total number of beneficiaries dropped 4.7 percent, or by 25,990.
In commodities, crude for July delivery surrendered 2.5 percent to $95.70 a barrel.
In metals, gold for August delivery dropped nearly 6 percent to $1,292.40 an ounce on the New York Mercantile Exchange. Earlier, gold traded as low as $1,285 — a level last seen in a most-active contract since September 2010.
In the U.S., the Fed’s comments nudged down stocks more than 1 percent in midday trading on Thursday. The Dow Jones Industrial Average Index (INDEXDJX:.DJI) fell 1.7 percent, and the S&P 500 Index (INDEXSP:.INX) skidded 1.8 percent at 11:20 a.m. in New York.
In China, Canada’s second-largest trading partner, a manufacturing gauge released by HSBC Holdings Plc and Markit Economics on Thursday reached 48.3 this month, from 49.2 in May. A reading below 50 indicates contraction.
In the currency market, the Canadian dollar posted its biggest loss in almost a month versus its U.S. peer. The loonie slipped 0.9 percent to C$1.0361 per U.S. dollar at 10:46 a.m. in Toronto. It weakened as much as 1 percent, the biggest intraday drop since May 22. One loonie buys 96.52 U.S. cents. Reported by Proactive Investors 2 hours ago.
The resource-heavy benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) fell 1.6 percent to 12,070.76 at 12:20 p.m. in Toronto. It had retreated as low as 12,057.21, the lowest level since April 18 in earlier trading. Ten shares declined for every stock that advanced. The 237-member gauge has lost 3 percent so far this month.
Bernanke said on Wednesday that the Fed, which buys $85 billion of Treasury and mortgage debt each month, may begin cutting purchases this year and snap the program next year should the U.S. economy continue to improve.
Financials, the main measure's most heavily-weighted sector, retreated 0.9 percent, as all ten sectors fell.
The materials sub-index, which includes mining shares, plummeted 4.4 percent as gold tumbled to a two and a half year low on Bernanke’s remarks. Barrick Gold Corp. (TSE:ABX), the world’s largest gold producer, gave back 8.4 percent to a record low of $16.99. Teck Resources Ltd. (TSE:TCK.B), the nation’s largest diversified miner, shed 1.5 percent to C$22.75. OceanaGold Corp. (TSE:OGC), which mines in New Zealand, dipped 17.5 percent to C$1.18.
Energy, the main index's second most heavily weighted sector, dropped 1.4 percent as oil, Canada’s largest export, slid on Thursday driven by Bernanke’s comments in addition to weak manufacturing-activity figures from China and an increase in U.S. oil supply.
TransGlobe Energy Corp. (TSE:TGL), a Canadian oil producer focused in Egypt, tumbled 9 percent to C$6.52, the lowest price in three years, after trimming its full-year production outlook as the North African country “works through its current macro-economic challenges.” Expected average production for 2013 has been reduced to between 19,000 and 20,000 barrels of oil per day, the Calgary, Alberta-based company said in a statement on Thursday.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) sank 2.6 percent to 899.47, the lowest level in more than a year, stretching this year’s losses to 26.3 percent.
In other corporate news, Rona (TSE:RON)(TSE:RON.PR.A) said Thursday that it has agreed to sell its commercial and professional market division to a subsidiary of EMCO Corp for around $215 million, sending shares of the hardware and home renovation retailer lower.
The home renovation retail chain has been struggling amid increasing competition and the high cost of goods weighing on its bottom line, and said the deal is in line with its priorities that have been focused on unlocking the potential of its retail and distribution business. Shares of Rona were down 0.9 per cent at C$10.15 at last check.
In economic news, the ratio of Canadian household debt to disposable income fell for a second quarter after reaching a record last year, suggesting consumers are heeding warnings about the risks of too much borrowing. Statistics Canada said in Ottawa on Thursday that credit-market debt such as mortgages slid to 161.8 percent of disposable income, compared with a revised 162.6 percent in the prior three-month period. The agency said mortgage borrowing grew at the slowest pace since the 2009 recession.
Also on Thursday, Statistics Canada said the number of Canadians receiving jobless benefits fell 0.5 percent in April from the previous month. It said the number of regular beneficiaries declined by 2,450 to 521,6300. From the year-earlier month, the total number of beneficiaries dropped 4.7 percent, or by 25,990.
In commodities, crude for July delivery surrendered 2.5 percent to $95.70 a barrel.
In metals, gold for August delivery dropped nearly 6 percent to $1,292.40 an ounce on the New York Mercantile Exchange. Earlier, gold traded as low as $1,285 — a level last seen in a most-active contract since September 2010.
In the U.S., the Fed’s comments nudged down stocks more than 1 percent in midday trading on Thursday. The Dow Jones Industrial Average Index (INDEXDJX:.DJI) fell 1.7 percent, and the S&P 500 Index (INDEXSP:.INX) skidded 1.8 percent at 11:20 a.m. in New York.
In China, Canada’s second-largest trading partner, a manufacturing gauge released by HSBC Holdings Plc and Markit Economics on Thursday reached 48.3 this month, from 49.2 in May. A reading below 50 indicates contraction.
In the currency market, the Canadian dollar posted its biggest loss in almost a month versus its U.S. peer. The loonie slipped 0.9 percent to C$1.0361 per U.S. dollar at 10:46 a.m. in Toronto. It weakened as much as 1 percent, the biggest intraday drop since May 22. One loonie buys 96.52 U.S. cents. Reported by Proactive Investors 2 hours ago.