Canadian Stocks Resume Declines as Oil Slumps to Six-Year LowEric Lam
Canadian stocks resumed their slide, falling for the fourth time in five sessions, as crude prices traded at the lowest in more than six years and financial shares slumped.
Energy producers paced a decline in equities as crude futures dropped 1.5 percent in New York amid an increase in U.S. drilling and the prospect OPEC production may rise to a record after sanctions on Iran are lifted. Concerns grew that demand for oil may slip as manufacturing in New York unexpectedly shrank and Japan’s economy contracted last quarter.
The Standard & Poor’s/TSX Composite Index fell 26.35 points, or 0.2 percent, to 14,251.53 at 4 p.m. in Toronto, paring a loss of as much as 0.7 percent in the final half hour of trading. The benchmark Canadian equity gauge has fallen 2.6 percent this year.
Commodities producers are the worst-performing industries in the S&P/TSX this year as crude has slumped more than 30 percent from this year’s June peak into a bear market and metals from copper to gold have declined amid concern global growth is slowing. Energy and raw-materials account for about 30 percent of the benchmark equity gauge.
Trican Well Service Ltd. plunged 11 percent, extending a 2000 low, after plunging a record 32 percent Aug. 14. The company warned there’s a risk it won’t emerge from the oil slump. The stock has slumped 78 percent this year, the worst-performing stock in the S&P/TSX.
Trican forecasts breaching a covenant with lenders by the end of September that may trigger its debt to become due on demand.
Financial shares dropped 0.5 percent. Royal Bank of Canada and Bank of Montreal retreated at least 0.7 percent. The nation’s largest lenders are scheduled to report third-quarter earnings beginning Aug. 25.
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