- Oil drops as U.S. producers increased drilling a fourth week
- Gold tumbles as global equities rally, Fed weighs rate hike
Canada stocks fell the most in a month, dropping from the highest level in a year to halt a three-day advance as commodities producers retreated with crude and gold.
The S&P/TSX Composite Index lost 0.7 percent to 14,498.10 at 4 p.m. in Toronto. The benchmark is up 11 percent in 2016, making Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 22.3 for the S&P/TSX, about 11 percent higher than the S&P 500 Index.
Raw-materials and energy producers tumbled at least 1.9 percent, the two biggest laggards among 10 industries in the S&P/TSX. They account for about one-third of the benchmark by weighting. Suncor Energy Inc. and Barrick Gold Corp. fell at least 3 percent.
Oil dropped to the lowest level in three months, down 2.4 percent in New York to extend losses after a weekly decline last week. U.S. producers increased drilling for a fourth week, even as government data points to U.S. supplies remaining ample as the summer driving season comes to a close. The S&P/TSX Energy Index dropped to the lowest in a month.
Gold prices also fell, extending the first back-to-back weekly loss since May. Global markets have rallied following a brief swoon after the U.K. voted to leave the European Union, while strengthening U.S. economic data has prompted traders to increase bets of a rate increase.
Today’s decline in raw-material shares pares the rally this year to 53 percent, which remains the best such performance for the group in at least 30 years, according to data compiled by Bloomberg. Mining and energy stocks have propelled Canada to the second-best performance among developed markets, trailing only New Zealand. It’s a far cry from last year, when the S&P/TSX was one of the worst-performing markets in the world, slumping the most since the 2008 Financial Crisis.
Valeant Pharmaceuticals International Inc. added 0.6 percent, rebounding from a two-day slide. The struggling drugmaker said Friday it had received a letter from the Food and Drug Administration over its application for an eye drop medication due to some deficiencies at a manufacturing facility.