Gold helps blunt TSX loss
Stock markets tumbled Thursday, but the Toronto Stock Exchange’s main index fared better than its U.S. counterparts due to the strength of gold and other commodities.
The S&P/TSX composite index dropped 48.57 points to 15,033.64.
South of the border, the Dow Jones industrial average fell 274.14 points to 21,750.73, while the S&P 500 shed 38.10 points to 2,430.01. The Nasdaq composite slipped 123.20 points to 6,221.91.
“I think on a relative basis, Canada’s had quite a good day,” said Tim Morton, senior vice-president at TD Wealth.
The Toronto index saw some of its losses offset by gains in gold stocks — with the global gold sector leading the day’s performance. The December gold contract climbed $9.50 to $1,292.40 US an ounce.
Gold is seen as a safe haven for investors and they turned to the commodity as American indices dipped and reports came in of a terrorist attack in Spain. A van killed a dozen people and injured others when it drove into pedestrians at the Las Ramblas promenade frequented by tourists.
American markets took a bigger hit than in Canada partly because political noise out of the country continued to unnerve people slightly, said Morton.
He added the U.S. markets have had a strong year and sometimes need a rest or sell-off to remain grounded.
The Canadian dollar was trading at an average price of 79.07 cents US, up 0.32 of a U.S. cent.
The September crude contract advanced 31 cents to $47.09 US per barrel. The September natural gas contract was up 3.9 cents to about $2.93US per mmBTU and the September copper contract fell 1.6 cents to $2.94 US a pound.
Meanwhile, Canadian manufacturing sales fell in June following three consecutive months of gains, with declines led by the petroleum and coal industry.
Manufacturing sales slipped 1.8 per cent overall to $53.9 billion in June, Statistics Canada said Thursday in a monthly report.
Sales also fell 1.0 per cent in constant dollars, indicating a lower volume of manufactured goods was sold in June.
“After several strong months, the Canadian manufacturing sector hit a speedbump in June with sizable declines in both value and volume terms,” TD Bank senior economist Michael Dolega wrote in a report.
The June report did not alter TD’s view for the second quarter but suggested a “marked deceleration of growth” for the third quarter is in the cards, Dolega added.