Canada Stocks Cap Worst Slide Since July Amid Commodities Routby
Bloomberg Commodity Index retreats 7th day to trade at '99 low
Resource-rich S&P/TSX among worst performers this year
The resource-heavy Canadian stock benchmark fell to a six-week low after capping its longest losing streak since July, as concern that growth in Europe and China will hurt demand renewed a rout in commodities.
Valeant Pharmaceuticals International Inc. contributed the most to declines in the benchmark index as the embattled drug maker tumbled to the lowest since 2013. Energy producers retreated as oil fell through $42 a barrel in New York to a two-month low.
Canadian equities have been among the worst-performing in the world this year, led by declines in natural-resource and health-care stocks, as the country’s stock market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest-rate hike from the Federal Reserve.
The Standard & Poor’s/TSX Index fell 214.75 points, or 1.6 percent, to 13,127.18 at 4 p.m. in Toronto. The benchmark equity gauge has lost 4.3 percent in its longest losing streak since July 27. The slump extended declines this year to 10 percent, trailing only Singapore and Greece among developed markets.
Commodities tumbled as signs that global growth is slowing mounted. Data on Thursday showed industrial production in the euro area fell more than economists forecast. Earlier this week China data showed imports to the country slumped amid slowing demand for resources from heavy industries. China is Canada’s second-largest trading partner after the U.S.
Manulife Financial Corp. lost 3.7 percent, the most in two months, after posting a 43 percent slide in third-quarter profit blamed on its slumping oil and gas investments. Manulife, Canada’s largest insurer, is one of more than 50 companies in Canada to report quarterly results Thursday.
Of the nearly 200 companies in the Standard & Poor’s/TSX Composite Index to report thus far in the current period, about 60 percent missed revenue estimates, according to data compiled by Bloomberg.
Valeant dropped 6.4 percent, to a July 2013 low. Valeant, briefly the largest stock in Canada by market capitalization this year, has lost 72 percent from an Aug. 5 high amid pressure over how it prices its drugs. The drugmaker said in a conference call Tuesday that the decision to cut ties with pharmacy Philidor Rx Services would meaningfully affect its dermatology business.