The Toronto stock market was lower for a sixth session Monday amid weak Chinese data and deal making in the Canadian financial sector.
The S&P/TSX composite index dropped 21.77 points to 12,351.53.
Shares of E-L Financial Corp. jumped after it announced the pending $1.125-billion sale of Dominion of Canada General Insurance Company to Travelers Companies Inc., a major U.S. insurance company. E-L Financial gained $57.99 or 9.8 per cent to $649.99.
The Canadian dollar continued to rally, supported by a solid report on the housing sector and last week’s Statistics Canada reporting showing that job creation for May was better than expected, coming in at an impressive 95,000 jobs.
The currency rose 0.13 of a cent to 98.19 cents US after Canada Mortgage and Housing Corp. said that housing starts were trending at 182,756 units in May compared to 182,971 in April. The trend is a six-month moving average of the monthly seasonally adjusted annual rates of housing starts.
But the seasonally adjusted standalone annual rate was 200,178 units in May, an increase from 175,922 in April.
U.S. indexes were little changed after registering sharp gains at the end of last week because of a strong jobs report.
The Dow Jones industrials were off 3.15 points to 15,244.97, the Nasdaq slipped 1.7 points to 3,467.52 and the S&P 500 index was down 1.02 points to 1,642.36.
Prices for oil and copper declined as data released during the weekend showed China’s trade, retail sales and other activity in May were weaker than expected, fuelling concerns about the country’s shaky economic recovery.
China’s trade surplus rose to $20.4-billion in May from $18.2-billion in the prior month.
However, export growth slowed dramatically to just one per cent from a year ago, which was the slowest increase since July 2012. Imports slipped 0.3 per cent from year-earlier levels.
“Of those three figures, I’d say that the weak import result is the most worrying, as it suggests domestic demand has weakened considerably,” said BMO Capital Markets senior economist Jennifer Lee.
“Slower export growth is not surprising, particularly given the slump in Europe but slower imports are a concern.”
The base metals sector gave back 0.8 per cent while July copper fell four cents to $3.23 a pound on top a 10-cent slide over the past two sessions. Copper is widely viewed as an economic barometer as it is used in so many applications. Sector heavyweight Teck Resources lost 35 cents to $25.30 (Canadian).
August bullion was off $5.30 to $1,377.70 (U.S.) an ounce, helping push the gold sector down 0.85 per cent. Goldcorp Inc. faded 48 cents to $28.61.
July crude on the New York Mercantile Exchange shed 23 cents to $95.80 a barrel. The energy sector declined 0.3 per cent and Husky Energy gave back 31 cents to $28.59.
Telecoms were positive with Telus Corp. ahead 28 cents to $34.95.
U.S. markets had a strong run last week with the Dow ahead over 200 points Friday 175,000 jobs were created during May, around 10,000 more than had been expected.
Traders hope the jobs data isn’t strong enough to persuade the Federal Reserve to start tapering its bond purchases. The quantitative easing program has kept interest rates low and also helped fuel a strong rally on stock markets this year, leaving the Dow industrials up a good 16 per cent year to date.
Markets have been volatile over the past couple of weeks after Fed Chairman Ben Bernanke said the U.S. central bank might pull back on its $85-billion-a-month bond-buying program if economic data, especially hiring, improved significantly. Other Fed officials have spoken about a winding down of asset purchases sooner.
At the same time, the TSX shrank 2.14 per cent, leaving the main index down about 60 points year to date as mining stocks in particular continued to get pummelled from lower commodity prices and a sluggish global recovery.
Meanwhile, in Japan the first-quarter growth rate was revised up from an annualized rate of 3.5 per cent to 4.1 per cent. The data sent Tokyo’s Nikkei index up 4.9 per cent.
Elsewhere in Asia, Hong Kong’s Hang Seng index added 0.2 per cent while South Korea’s Kospi gained 0.5 per cent. Markets in China were closed for holidays.
European bourses were mixed as London’s FTSE 100 index rose 1.06 per cent, Frankfurt’s DAX gained 0.98 per cent while the Paris CAC 40 was off 0.15 per cent.
On the corporate front, Air Canada says capacity on its domestic services will increase more this year than previously forecast. It now expects 2013 domestic capacity will grow by 1.5 per cent to 2.5 per cent over 2012 levels, a full percentage point above the levels announced in early May, when Air Canada issued its first quarter financial report and its shares advanced six cents to $2.33.
McDonald’s says that global sales rose 2.6 per cent at restaurants open at least a year during May, helped by an extra Friday in the month. Its shares rose 1.6 per cent to $99.85.