Canada Stocks Cap Worst Slide in Decade on Global Growth Fears

Updated on
  • S&P/TSX among worst in world this year as commodities collapse
  • Natural resource producers down more than 5% during slide

Canadian stocks fell an eighth day, the worst stretch for the resource-dominated market since before the financial crisis, amid a worsening outlook for global growth from Asia to Europe and the U.S.

The Standard & Poor’s/TSX Composite Index slipped 0.4 percent, led by declines in the nation’s largest banks. Earlier advances in energy producers and health-care companies weren’t enough to maintain a brief midday rally as the index fell in the final hours of trading. 

The equity gauge has lost 4.6 percent in eight days for the longest losing streak since June 2002. Natural-resource producers have slumped more than 5 percent over that period as the Bloomberg Commodity Index tracking prices from copper to crude fell to a 1999 low.

S&P/TSX slides 4.6% in eight days

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 market is looking for a stamp of approval,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about C$5 billion. “Earnings have been mediocre. These very weak numbers make things more difficult for the Fed.”

The S&P/TSX fell 51.78 points to 13,075.40 at 4 p.m. in Toronto. The benchmark equity gauge has lost 11 percent this year, trailing only Singapore and Greece among developed markets.

Euro-area gross domestic product rose 0.3 percent in the third quarter, short of the median 0.4 percent analysts’ estimate in a Bloomberg survey. Meanwhile U.S. retail sales increased less than forecast in October as consumers pocketed money saved from cheaper gas. The data come after figures earlier in the week indicated imports in China, one of the world’s largest consumers of natural resources, had retreated on slowing demand from heavy industries.

Energy producers rebounded from a six-week low, reversing earlier declines, led by gains from Encana Corp. to Enerplus Corp. of at least 7 percent. Drugmaker Concordia Healthcare Corp. jumped 16 percent to a one-month high after reporting third-quarter earnings and revenue ahead of estimates.

Toronto-Dominion Bank and Royal Bank of Canada slipped more than 1.3 percent to weigh on financial companies in the S&P/TSX. The group posted its steepest weekly decline in almost three months.

Of the more than 200 companies in the S&P/TSX to report in the current period, about 60 percent missed revenue estimates, according to data compiled by Bloomberg.

Valeant Pharmaceuticals International Inc. added 2.5 percent, rebounding from a two-year low. Valeant, briefly the largest stock in Canada by market capitalization this year, has lost 71 percent from an Aug. 5 high amid pressure over how it prices its drugs. 

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