Canadian stocks fell to a seven-month low as commodities producers slumped amid concern a cash crunch in China will hurt growth in the world’s biggest consumer of materials and energy.
All 10 industries in the Standard & Poor’s/TSX Composite Index retreated, led by a 3.8 percent decline in raw-materials producers. Teck Resources Ltd. and Endeavour Silver Corp. lost at least 6.8 percent as copper and silver prices tumbled. Enbridge Inc. slid 2 percent as three oil pipelines in Alberta remained closed by a leak related to flooding.
The S&P/TSX fell 158.80 points, or 1.3 percent, to 11,836.86 at 4 p.m. in Toronto, the lowest level since Nov. 15. The benchmark index is down 4.8 percent this year. Trading volume was 2.7 percent below than the 30-day average.
“There’s weakness across the board. It’s getting ugly,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about C$1 billion ($953 million). “People are very nervous on a number of fronts. Europe is just a mess but China and the U.S. are the two economies that everybody is focused on. China numbers show the economy is slowing there. That is something that has everybody worried.”
The S&P/TSX extended its monthly loss to 6.4 percent as China’s central bank signaled it would provide no relief from a cash squeeze. China is the world’s second-largest economy and Canada’s second-biggest trading partner behind the U.S. The country’s benchmark money-market rates last week climbed to a record as the central bank refrained from using open-market operations to provide liquidity.
Investors are also considering whether growth in the U.S. is strong enough for the Fed to begin phasing out stimulus later this year. U.S. durable goods orders probably rose and house prices continued to recover, economists said before reports this week. The S&P/TSX trimmed an early drop of 2 percent after Fed Bank of Dallas President Richard Fisher said investors shouldn’t overreact to plans to slow bond purchases.
Each of the benchmark index’s 10 sectors retreated at least 0.4 percent. The index that tracks producers of raw materials plunged 3.8 percent to the lowest since December 2008 as all but one of its 55 members declined.
Teck Resources, Canada’s largest diversified miner, fell 6.8 percent to C$21.22 and Endeavor Silver slid 10 percent to C$3.35, its lowest level since August 2010. Copper futures plunged to the lowest in almost three years and silver lost 1.8 percent.
Energy producers declined 1.5 percent. Oil prices rose for the first time in four days on supply concerns, reversing an early drop that took crude to a three-week low. Niko Resources Ltd. fell 2.3 percent to C$6.85 and Penn West Petroleum Ltd. lost 2.4 percent to C$11.29.
Enbridge dropped 2 percent to C$42.64. The company closed one pipeline after discovering a 750-barrel spill on June 22. Two more lines, also in Alberta, were shut as a precaution. Enbridge, Canada’s biggest pipeline operator, has not given a timeline for service resumption. Alberta has the third-largest proven oil reserves in the world, after Saudi Arabia and Venezuela, according to the provincial government.