TORONTO – Canada’s main stock index lost a little ground Thursday as a further drop in the price of oil to an eight-month low weighed on the key energy sector.
Markets on both sides of the border were softer after a very strong day following the U.S. midterms, says Jayson Moss, research analyst at Franklin Bissett Investment Management.
“What’s weighing particularly on the Canadian market is the fact that we’re seeing oil entering a bear market, down now 21 per cent since the high on Oct. 3, on concerns that the market will be oversupplied and rising U.S. inventories,” he said in an interview.
The December crude contract was down for a ninth straight session, falling by $1 at US$60.67 per barrel. That’s the lowest level since March 8.
The S&P/TSX composite index closed down 11.96 points to 15,357.47 after hitting a low of 15,293.29 on 414 million shares traded.
The health-care sector fell the most as cannabis stocks gave back some of Wednesday’s strong gains. Energy stocks lost 1.66 per cent.
Industrials fell on a 24 per cent decrease in Bombardier’s shares after investors were concerned by its reduced free cash flow guidance amid efforts to refocus the company by selling some assets.
Moss said companies have recently faced pretty significant share price movements when they fall short of beat expectations.
Canadian Tire gained almost three per cent after posting strong results Thursday, while Freshii Inc. hit an all-time low of $1.95 and closed down 33.4 per cent to $2.65 after withdrawing its 2019 outlook.
“It just feels like we’re more in the later innings of this bull market where we have seen some pretty inflated valuations and high street expectations,” he added.
In New York, the Dow Jones industrial average gained 11.12 points to 26,191.42. The S&P 500 index lost 7.05 points at 2,806.84, while the Nasdaq composite was down 39.87 points at 7,530.88.
Moss said the Federal Reserve’s decision not to raise interest rates had no appreciable impact on markets. However, he expects a final rate increase of the year in December.
The Canadian dollar traded at an average of 76.25 cents US compared with an average of 76.36 cents US on Wednesday.
The December natural gas contract was down 1.2 cents at US$3.54 per mmBTU.
The December gold contract was down US$3.60 at US$1,225.10 an ounce and the December copper contract was down 1.85 cents at US$2.74 a pound.
