Canada Stocks Fall as Commodities Slump to 12-Year LowEric Lam
Canadian stocks fell a second day as commodities plunged to a 12-year low, with crude prices tumbling after Goldman Sachs Group Inc. cut its price forecasts.
Legacy Oil & Gas Inc., MEG Energy Corp. and Surge Energy Inc. plunged at least 11 percent. Canadian Western Bank and National Bank of Canada dropped at least 3.2 percent to pace declines among financials stocks in the Standard & Poor’s/TSX Composite Index. Amaya Inc. jumped 12 percent as the online gaming operator said it is considering proposals for one of its properties. Ebola drugmaker Tekmira Pharmaceuticals Corp. soared 56 percent after agreeing to a merger with OnCore Biopharma Inc.
The S&P/TSX fell 119.91 points, or 0.8 percent, to 14,265.01 at 4 p.m. in Toronto. The benchmark equity gauge has dropped 2.5 percent this year.
Legacy Oil & Gas sank 15 percent, MEG Energy retreated 11 percent and Surge Energy plunged 12 percent to C$2.52, the lowest since 2009, as all 66 members of the S&P/TSX Energy Index fell. The group lost 3.8 percent as five of 10 industries in the benchmark Canadian equity gauge retreated on trading volume 6.6 percent higher than the 30-day average.
Canadian Natural Resources Ltd. declined 4.1 percent after cutting C$2.4 billion of 2015 capital spending, to C$6.2 billion due to the plunge in oil prices.
The Bloomberg Commodity Index, which tracks a basket of global commodities prices, slumped 1.7 percent to a 2002 low.
West Texas Intermediate crude plunged 4.7 percent to $46.07 a barrel in New York after a seventh weekly drop.
Crude has to “stay lower for longer” and trade near $40 a barrel in the first half of the year if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts in a report.
First Quantum Minerals Ltd. sank 6.5 percent and Teck Resources Ltd. dropped 3.5 percent. Copper fell in London, touching $5,966, the lowest since October 2009, on concern demand is weakening in China, the largest consumer of the metal, to the weakest since 1990.
The economy in China is forecast to slow to 7 percent in 2015 from 7.4 percent last year, according to economists’ estimates compiled by Bloomberg.