Energy, financials drag down TSX

The Toronto stock market turned lower Tuesday to start the holidayshortened trading week as its heavily weighted metals and mining, energy and financials sectors all pulled back.

The S&P/TSX composite index lost 119.63 points to 13,844.73 after having been closed for Thanksgiving on Monday. The loonie was down 0.49 of a cent (U.S.) at 76.81 cents.

The TSX metals and mining sector was down more than 6 per cent, while energy was down more than 2 per cent and financials declined 0.2 per cent.

Negative news affecting markets included yet another report out of China pointing to a continuing slow- down in the world’s second-largest economy, while another report, from the International Energy Agency (IEA), predicted lower global growth in oil demand next year.

“China makes up a huge part of the demand for base metals, so any weakness in Asia is going to have those negative ripple effects on many of the materials stocks,” said Craig Jerusalim, portfolio manager at CIBC Asset Management.

The November contract for benchmark crude was down 44 cents at $46.66 a barrel, while November natural gas lost four cents to $2.50 per thousand cubic feet. December gold rose 90 cents to $1,165.40 an ounce while December copper gave back three cents to $2.39 a pound.

In New York, where markets were open Monday, the Dow Jones industrial average gave back 49.97 points to 17,081.89, snapping a seven-day winning streak. The S&P 500 slipped 13.77 points to 2,003.69 and the Nasdaq retreated 42.03 points to 4,796.61.

“For anyone with a weak stomach, the volatility of this market is just not for them,” Jerusalim said, advising investors to tune out the short-term fluctuations and focus on stocks with solid earnings and profitability.

The IEA, in its oil market report for October, said global growth in oil demand is expected to slow from its five-year high of 1.8 million barrels a day in 2015 to1.2 million barrels a day in 2016. That would be closer to its long-term trend as previous price support will probably wane.

It said world oil supply held steady near 96.6 million barrels a day in September as lower non-OPEC production was offset by a slight increase in OPEC crude.

Meanwhile, there was another worrisome report out of China, this one showing imports by the Asian giant plunged 20.4 per cent in September from a year earlier to $145.2 billion.

That was worse than the 5.5-percent decline in imports in August and more than the 15-per-cent drop that had been expected by analysts. Exports contracted 3.7 per cent, although that was better than the 13.8per-cent decline in August.

Trade weakness has raised serious doubts about whether China can meet its 7-per-cent economic growth target for this year.