TORONTO — Canada’s main stock market in Toronto on Monday dropped sharply as resources shares led the fall over the continued selloff in commodities, following an overnight plunge in Chinese stock market.
Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite Index lost 184.87 points, or 1.3 percent, to 14,001.37 points.
The market sank broadly after the opening bell in the morning, after Chinese stocks nosedived on Monday as investors became unnerved by weak economic data, with the benchmark Shanghai Composite Index plunging 8.48 percent, its worst single-day loss in eight years.
Resources shares in Toronto equities market suffered the biggest selloff as investors were worried about the slowdown of China’s demand for commodities including the minerals products, which may trim more profits of the mining sector.
Metals and mining, down 3.65 percent, logged the biggest losses in the eight major sectors in TSX, after the basic metals giants First Quantum Minerals Ltd. declined 3.75 percent to 11.56 Canadian dollars (about USD 8.86) a share, and Teck Resources Ltd. faded 4.75 percent to 8.82 Canadian dollars a share.
Losses were also seen in gold shares, with S&P/TSX Global Gold Index shrinking 4.08 percent to 119.55 points, when the world’s biggest gold company Barrick Gold dived 5.17 percent to 8.98 Canadian dollars per share.
The energy sector fell 2.81 percent as the Light Sweet Crude Oil (WTI) for September delivery was down 0.75 U.S. cents to settle at USD 47.39 a barrel on the New York Mercantile Exchange Monday.
Most of leading stocks from the oil patch lost ground when Encana plunged 5.75 percent to 9.67 Canadian dollars a share while Canadian Oil Sands dropped 3.71 percent to 7.01 Canadian dollars a share.
Commodity prices gained ground in June, but according to a report issued Monday by Scotiabank, the third biggest bank in Canada, the prices fell in early July alongside a “trifecta” of negative developments — concern over the fallout on the euro zone of the Greek debt situation, the sharp correction in China’s equity markets and the prospect of an eventual return of Iran’s oil to world markets.
What’s more, the bank believed that the rising U.S. dollar, combined with lower-than-expected bullion purchases by China’s central bank since 2009, triggered “bear-raid” selling by Chinese hedge funds recently.
The most weighed sector Financials in TSX also tumbled when Royal Bank of Canada fell 1.43 percent to 73.52 Canadian dollars a share.
The only gainer Health Care, by contrast, inched up 0.13 percent when Canada’s biggest drug maker Valeant Pharmaceuticals International rallied 3.3 percent to 337.49 Canadian dollars a share.
On the currency front, the Canadian dollar on Monday lowered a little to USD 0.7666, compared with USD 0.7672 in Friday’s session.