Canadian Stocks Sink to Two-Week Low as Banks, Energy Retreatby and
Royal Bank joins global selloff in lenders on credit concerns
Oil producers retreat as crude hovers around $30 a barrel
Financial and energy companies dragged Canadian stocks lower for a third day, as equities worldwide sank amid deepening concerns about the health of the global economy.
The Standard & Poor’s/TSX Composite Index slumped 2 percent to 12,282.65 at 4 p.m. in Toronto, the lowest level since Jan. 15. The benchmark gauge has fallen 5.6 percent this year, making it the second-best performing developed market tracked by Bloomberg, after New Zealand.
While the U.S. market staged an afternoon rebound to finish Tuesday little changed, Canada’s resource-rich benchmark equity gauge was held back by plummeting oil prices. As crude fell more than 4 percent to settle near $28 a barrel, energy companies retreated for a third straight day and all 55 stocks in the industry declined. Ensign Energy Services Inc. plunged 10 percent to its lowest level since 2000.
Banks contributed the most to losses, joining a selloff in global financial shares amid growing concerns that the rout in oil will weaken lenders’ balance sheets. Lenders in the gauge declined 2.2 percent and only five stocks in the group advanced. Royal Bank of Canada, Toronto-Dominion Bank, and Bank of Montreal all fell more than 2.3 percent.
Utility stocks fell 4.8 percent, the biggest decline since 2001 and the most among the 10 sectors. Fortis Inc. tumbled 10 percent, the most ever, after agreeing to buy ITC Holdings Corp. for $6.9 billion in cash and stock, adding its high regulated returns in what will be the largest Canadian takeover of a U.S. utility.
Industrial companies rose 1.1 percent for the biggest gain in the S&P/TSX on Tuesday. Bombardier Inc. increased 2.6 percent, as the company entered partnership with Turkish manufacturer Bozankaya to produce high-speed trains.