TSX Slides On Oil, Mining As Macro Worries Return
January 17, 2013 3:51 PM EST
Canada's main stock index slipped on Wednesday, led by energy and material shares, as gloomy economic commentary from the World Bank and weak industrial data out of Europe renewed investor concerns about global growth.
Investors shifted their focus, if briefly, from corporate earnings to macroeconomic concerns after the World Bank said a slow economic recovery in developed nations was holding back the global economy as it sharply cut its outlook for world growth in 2013.
Meanwhile, demand for new cars in recession-bound Europe fell to a 17-year low in 2012, highlighting the crisis for automakers on the continent.
"The economic risk and the political risk are still out there. (But) we're really relying on company fundamentals," said Michael Newton, associate director and portfolio manager at Macquarie Private Wealth Inc.
Several of Canada's major companies, including Canadian National Railway Co, will be reporting quarterly earnings next week.
Investors are looking for strong evidence of earnings and sales strength as the fourth-quarter reports come rolling in, not more blame being placed on macro conditions, Newton said.
"It's going to be a really important quarter. This is your third visit to the doctor," he added.
The index eased from a 10-1/2 month high hit on Tuesday, when the materials sector outperformed the market. The group on Wednesday played a major role in leading the market lower.
"The market has been on a nice tear. We need to get confirmation from CEOs and earnings that we have turned the corner," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE slipped 33.15 points, or 0.26 percent, to 12,608.82.
Seven of the 10 main sectors on the index were in the red. However, the information technology sector was up 0.2 percent, helped by a nearly 2 percent rise in BlackBerry maker Research In Motion Ltd to C$14.55. Shares had climbed as much as 6.2 percent earlier in the session.
The company said it was extremely encouraged by the response to a program of incentives aimed at persuading its biggest clients to run its soon-to-launch line of BlackBerry 10 devices.
Magna International Inc gained 1.9 percent to C$52.14 after the auto parts manufacturer said it expects sales to edge higher this year, citing strong growth in fast-growing markets such as China and Brazil.
The materials sector, which includes mining stocks, slipped nearly 0.7 percent. Fertilizer giant Potash Corp lost 0.9 percent to C$41.21, and miner Barrick Gold Corp fell 1 percent to C$33.69.
The financial sector, the index's largest, gave back 0.3 percent, with Bank of Nova Scotia edging 0.5 percent lower to C$57.42.
Energy stocks dropped almost 0.4 percent despite a rise in oil prices. Barclays cut its price target on a number of oil and gas firms including Canadian Natural Resources Ltd. It gave back 1.2 percent to C$28.74 and was the most influential decliner.
Most Popular Slideshows
Join the Conversation
- Chilling: New ISIS Video Addresses Australia; Aussie Teen Delivers Message
- The Pirate Bay Blockade: Cost Of Blocking Websites Like TPB Is Ridiculously High
- Xiaomi Mi4 And MiPad Prices Likely Slashed, Thanks To Rivals Oppo, OnePlus And Meizu
- Virginia Woman Who Posted Naked Image Of Ex-BF’s New Partner 1st Person Charged Under Revenge Porn Law
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- Meizu MX4 Pro To Arrive In November In Black And White Colours, Features Higher Than QHD Display, Exynos 5430 SoC And 3 GB RAM
- iOS 8 Jailbreak Release Date is Doomed as Team Evad3rs Opts Out, Pangu Hits Snag – Report