TORONTO — Canada’s main stock index ended a positive week by closing lower Friday as the energy sector sank on a further drop in the price of oil which drove the loonie to a more than four-month low.
The S&P/TSX composite index closed down 83.03 points at 15,274.44. but up from 15,150.15 a week ago.
The December crude contract was down 48 cents at US$60.19 per barrel to the lowest level since February.
But the market decrease was about more than just oil, says Cavan Yie, a portfolio manager at Manulife Asset Management.
He said the third quarter hasn’t been a strong earning season. It has shown up in slowing revenue growth, higher than expected operating costs and disappointing margin performance.
“This was our fear several months ago when we saw inflation starting to creep up but it’s now manifesting themselves in financial performance,” he said in an interview.
And several large cap U.S. companies including Apple, Amazon and Google have pointed to slower growth ahead that has created some uncertainty.
“Some of these weaker outlooks isn’t constructive for equities and on top of that you also have the Fed unwavering on their hiking stance,” he said.
“So put all that together and you get a classic healthy correction in the equity markets.”
The cannabis-heavy health-care sector led on the downside, followed by technology, consumer discretionary, energy and materials. Utilities gained the most and industrials rose on a partial rebound by Bombardier Inc.
In New York, the Dow Jones industrial average lost 201.92 points to 25,989.30. The decrease was more than offset by three days of triple-digit gains, including a 545-point increase Wednesday in the wake of the U.S. midterm elections.
The S&P 500 index was down 25.82 points at 2,781.01, while the Nasdaq composite fell by 123.98 points to 7,406.90.
The Canadian dollar traded lower at 75.72 cents