Business and Economy
Canadian market suffers worse loss in 3 weeks
Canada’s main stock market in Toronto saw its largest retreat since Jan. 30 on Wednesday, as poor retail sales figures and lower crude oil prices contributed.
(Photo by Halava (Own work) [CC BY-SA 3.0)
The Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite dipped 92.15 points, or 0.58 percent, to close the day at 15,830.22 points. Six of the ten sub-groups finished the day in negative territory.
Prior to markets opening on the day, Statistics Canada reported that retail sales fell 0.5 percent in December, snapping four straight months of increases.
By category, nine of the 11 subsectors declined, with the motor vehicle and parts dealers (0.9 percent decline), and food and beverage stores (0.4 percent decline) contributing the most to the result. By region, nine of the 13 provinces and territories finished lower, with Ontario (0.9 percent decline) and Quebec (1.1 percent decline) having the biggest impact.
Diana Petramala, an economist at TD Economics, is not discouraged by the result.
December’s decline is coming on the back of four months of hearty gains, and despite the pullback the consumer remained a main driving force for Canadian economic activity in the fourth quarter of 2016, she wrote in a report.
“With the economy continuing to churn out jobs, interest rates still historically low and rapid home price growth continuing to boost household wealth across parts of ten country, consumers are likely to make a comeback in the early months of 2017,” Petramala added.
During the trading day, energy had the biggest impact, dipping 2.98 percent after the oil minister of Qatar believes half of non-OPEC members have not complied with their production limits. As a result, the price of Brent crude oil delivered for April fell 1.46 percent to USD55.85 a barrel.
Subsequently, shares of Calgary-based energy firms were down. Encana Corporation dipped 5.80 percent to 15.10 Canadian dollars (USD11.49), while Baytex Energy Corp. slide 5.08 percent to 5.07 Canadian dollars (USD3.86). Meanwhile, Suncor Energy Inc. closed at 42.13 Canadian dollars (USD32.04), a 1.31 percent decline.
Other groups to lose ground on the day included: Materials (1.24 percent), Consumer Discretionary (0.41 percent), Utilities (0.16 percent), Financials (0.10 percent), and Health Care (0.08 percent).
The news was not all bad on Wednesday, as the following four groups finished higher: Industrials (0.41 percent), Telecommunications (0.18 percent), Consumer Staples (0.04 percent), and Information Technology (0.02 percent).vThe TSX Industrials group was boosted by Air Canada shares rising 1.79 percent to close at 13.67 Canadian dollars (USD10.40). This gain from the country’s largest airline company outweighed a 1.17 percent decline in shares of Bombardier Inc. Shares of the Montreal-based plane and train maker closed the day at 2.53 Canadian dollars (USD1.92).
The Consumer Staples group, which is comprised of firms that produce, distribute or sell essential products stayed due to two group members being in the news. Montreal-based dairy producer Saputo Inc. shares rose 0.96 percent to 46.42 Canadian dollars (USD35.31) after reports that the firm was on the verge of a complete takeover of an Australian daily company that they currently have 88 percent stake in.
Also aiding the group was Toronto-based meat producer Maple Leaf Foods Inc. shares ticking up 0.30 percent to 29.94 Canadian dollars (USD22.77) after fourth quarter net earnings were more than double of the same period last year.
The Canadian dollar inched down 0.05 cents to close the session at USD0.7606.
