Canada’s main stock index fell on Friday and set for its biggest one-day percentage dip in nearly two weeks as energy shares were pressured by a plunge in oil prices.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was down 79.09 points, or 0.51 per cent, at 15,278.38.
The energy sector dropped 1.8 per cent, as prices of oil, one of Canada’s biggest export commodities, fell to multi-month lows on increased global supply and trade worries.
Pipeline operator TransCanada’s shares slip 1.6 per cent after a U.S. judge halted construction of its Keystone XL pipeline, in a blow to Canadian oil producers
Keystone XL will carry heavy crude from Alberta to Steele City, Nebraska, connecting key refining points in the U.S. Midwest and U.S. Gulf Coast, as well as export terminals in the Gulf.
Cenovus Energy Inc. was down 2.9 per cent, Canadian Natural Resources Ltd. 3.4 per cent and Husky Energy Inc. 2.3 per cent.
The materials sector, which includes precious and base metals miners, lost 1.7 per cent after gold and copper prices fell after the U.S. Federal Reserve stuck to its tighter monetary stance.
Top percentage gainers on the TSX included shares of Enerflex Ltd, which jumped 7.1 per cent, and a 7.8-per-cent gain in Bombardier Inc., a day after hitting a 1-year low on a disappointing free cash flow forecast.
Kinaxis Inc fell 15 per cent and Sierra Wireless was down 18.3 per cent after reporting quarterly results.
U.S. stocks fell on Friday, with shares of technology, energy and industrial companies taking a hit from concerns about global growth after a batch of weak Chinese data and a slide in oil prices.
As investors shunned growth stocks, the S&P technology index fell 1.76 per cent, led by Apple Inc’s 2.4-per-cent slide and semiconductor stocks tumbling 2.21 per cent.
The S&P energy index dropped 0.91 per cent as U.S. crude prices entered “bear market” territory, falling more than 20 percent since early October due to concerns over rising global supply.
“A lot of investors look at oil prices as the general indicator of the global economy, so it being weak is not a good sign,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Amid a bitter trade dispute between the Washington and Beijing, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity, while car sales fell for a fourth consecutive month.
The report sent global stocks into a tailspin, with trade-sensitive stocks such as Boeing Co and Caterpillar Inc sliding 0.8 per cent and 3.6 per cent, respectively.
The Federal Reserve policymakers, as expected, left interest rates unchanged following a two-day meeting on Thursday, and their policy statement signaled more rate hikes ahead, with the fourth hike this year expected in December.
The latest data on U.S. producer prices did little to ease worries about rising interest rates, which have hampered gains in stocks this year.
Prices paid by producers rose 0.6 per cent in October – their fastest pace in six years and easily beating expectations of 0.2 percent – fueled by a jump in costs for energy and trade services.
“It’s a classic risk-off driven by the fears of Fed, China and oil,” said Cliff Hodge, director of investments at Cornerstone Wealth in Charlotte, North Carolina.
The Dow Jones Industrial Average was down 188.63 points, or 0.72 per cent, at 26,002.59, the S&P 500 was down 25.47 points, or 0.91 per cent, at 2,781.36 and the Nasdaq Composite was down 120.20 points, or 1.60 per cent, at 7,410.68.
Eight of the 11 major S&P sectors were lower, with slight gains seen in the defensive real estate, consumer staples and utilities indexes.
Activision Blizzard Inc dived 12 per cent after the video game publisher gave a dismal fourth-quarter forecast.
Dow-member Walt Disney Co rose 2.8 per cent after the media company reported better-than-expected results as its theme parks and Marvel movie “Ant-Man and the Wasp” attracted crowd.
Oil prices fell more than one percent on Friday, with U.S. crude on track for its longest losing streak since 1984 as global supply increased and investors worried about the impact of lower economic growth and trade disputes on fuel demand.
Benchmark Brent crude fell below $70 a barrel for the first time since early April, and was down nearly 20 percent since reaching four-year highs at the beginning of October.
Brent crude futures fell 53 cents to $70.12 a barrel, a 0.8 percent loss. It was down about 3.7 percent for the week and more than 15 percent this quarter.
U.S. West Texas Intermediate crude futures were on track for the 10th straight day of declines, the longest such streak since July 1984, according to Refinitiv data.
WTI crude futures fell 48 cents to $60.19 a barrel, a 0.8-per-cent loss, after dropping under $60 a barrel to its lowest in eight months.
The U.S. crude contract had hit a low of $59.26, down $1.41 and off more than 20 per cent since its peak in October. That put it in “bear market” territory, borrowing a definition used in stock markets.
“What a difference a month makes,” said Michael Tran, commodity strategist at RBC Capital Markets.
“Market sentiment has shifted from the most bullish tone in years with many calling for $100 only weeks ago, to the weakest investor sentiment since the 2016 price trough”
Oil peaked in early October on concerns that U.S. sanctions on Iran that came into force this week would deprive the oil market of substantial volumes of crude, draining inventories and bringing shortages in some regions.