Canada’s main stock index fell on Friday as energy shares were pressured by a plunge in oil prices.
The Toronto Stock Exchange’s S&P/TSX Composite index declined 83.03 points, or 0.54 per cent, at 15,274.44.
The energy sector dropped 1.7 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 1.7 per cent after a U.S. judge halted construction of its Keystone XL pipeline, in a blow to Canadian oil producers
Cenovus Energy Inc. was down 2.2 per cent, Canadian Natural Resources Ltd. 2.7 per cent and Husky Energy Inc. 1.7 per cent. Imperial Oil Ltd. and Suncor Energy Ltd. lost 2.3 per cent and 1.1 per cent, respectively.
The materials sector, which includes precious and base metals miners, lost 1.6 per cent after gold and copper prices fell after the U.S. Federal Reserve stuck to its tighter monetary stance.
First Quantum Minerals Ltd. dropped 7.6 per cent, while Lundin Mining Corp. was down 4.1 per cent.
Leading the index were Enerflex Ltd, up 10.1 per cent, Bombardier Inc., up 10 per cent, and Exchange Income Corp., higher by 7 per cent.
Lagging shares were Sierra Wireless Inc., down 18.0 per cent, Kinaxis Inc., down 16.5 per cent, and Paramount Resources Ltd., lower by 12.9 per cent.
Wall Street’s three major indexes closed down on Friday after weak Chinese data and volatile oil prices raised concerns about global growth.
The Dow Jones Industrial Average fell 201.59 points, or 0.77 per cent, to 25,989.63, the S&P 500 lost 25.7 points, or 0.92 per cent, to 2,781.13 and the Nasdaq Composite dropped 123.98 points, or 1.65 per cent, to 7,406.90.
Data from China added to the downward pressure, showing factory-gate inflation slowed for the fourth month in October on cooling domestic demand and manufacturing activity.
On the U.S. side, producer prices rose more than expected in October and at their fastest pace in six years. But measures of underlying price pressure cooled, bolstering the view that the U.S. central bank is not facing a resurgence in inflation.
European shares dipped as mining and oil stocks sold off, but they managed to end the week with a small gain.
“You have all this data coming in and you have a lot of cross currents. We are in the midst of that peaking process for growth in the United States and we don’t know where things settle out with regards to the euro zone,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
Equities snapped a streak of seven straight days of gains on Thursday after the U.S. Federal Reserve held interest rates steady but appeared to remain on track to raise its key interest rate next month.
Some investors had hoped that the sharp share price falls during what has been called “Red October” might have encouraged the U.S. central bank to take a more dovish approach toward monetary policy.
The pan-European STOXX 600 index lost 0.37 per cent and MSCI’s gauge of stocks across the globe shed 0.13 per cent.
The U.S. dollar, which had weakened sharply after Tuesday’s U.S. mid-term elections, was up for a second straight day and on track for a fourth straight week of gains.
Further dollar gains can pose headwinds for risky assets as that translates into tightening financial conditions as most emerging market economies borrow in dollars. A strong dollar could also hurt earnings of multinational U.S. corporations.
The dollar index rose 0.19 per cent, with the euro down 0.26 per cent to $1.1332.
The equity weakness pushed bond yields lower. Benchmark 10-year notes last rose 12/32 in price to yield 3.1893 per cent, from 3.232 per cent late on Thursday.
Oil prices fell nearly 1 per cent on Friday as global supply increased and investors worried that oil demand growth could slow, with U.S. crude notching its longest stretch of daily declines since 1984.
Benchmark Brent crude fell below $70 a barrel for the first time since early April, and was down as much as 20 percent since reaching four-year highs at the beginning of October.
Brent crude futures fell 47 cents, or 0.7 per cent, to settle at $70.18 a barrel. It was down about 3.6 per cent for the week and more than 15 per cent this quarter.
U.S. West Texas Intermediate crude futures fell for the 10th straight day, the longest such streak since July 1984, according to Refinitiv data.
WTI crude futures declined 48 cents, or 0.8 per cent to end the session at $60.19 a barrel, 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 22 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.”
Demand worries followed forecasts for slower economic growth in 2019, largely due to a U.S.-China trade war.
On Friday, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity. The report sent global stocks into a tailspin.
Oil peaked in early October on concerns that U.S. sanctions on Iran that came into force this week would drain global crude inventories and bring shortages in some regions.
But other big producers have more than compensated for lost Iranian barrels. The United States, Russia and Saudi Arabia are pumping at or near record highs, producing more than 33 million barrels per day (bpd), a third of the world’s oil.