Canadian shares dropped for a second day as slumping oil prices nudged down energy producers amid mounting worries Greece may not survive default on its debt.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) fell 0.6 percent to 14,745.72 at 12:39 p.m. in Toronto. Two shares declined for every issue that advanced as 8 out of 10 share groups were in the negative territory.
The energy sector, the main index's second most heavily weighted group, retreated 1.1 percent as oil, Canada’s largest export, fell on the strong dollar. Suncor Energy (TSE:SU), Canada's largest oil sands producer, fell 1 percent to C$35.16. Canadian Natural Resources Limited (TSE:CNQ), Canada’s second-largest energy producer, slumped 2.4 percent to C$35.82.
Light, sweet crude for July delivery recently fell 1.3 percent to $60.01 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 0.9 percent to $64.51 a barrel on ICE Futures Europe.
The materials sub-index, which includes mining shares, fell 0.2 percent as gold was little changed.
B2Gold (TSE:BTO), the Canadian gold producer with assets in Latin America, Africa and Asia, gained 2.6 percent to C$2.01. B2Gold announced results from the optimized feasibility study of the Fekola gold project in Mali, which puts average annual gold production of 350,000 ounces per year for years one through seven at a cash cost of $418 per ounce. The miner called the results “robust.”
Eldorado Gold (TSE:ELD), the Canadian producer with mines in China and Greece, fell 3 percent to C$5.17. Eldorado Gold released an update for the phased development of its 95%-owned Olympias Mine in Greece. RBC says the update indicates Olympias Phase II remains on track to start production in mid-2016, while the start of the Skouries project has been slightly delayed to the first quarter of 2017 from late 2016.
Goldcorp (TSE:G), Canada’s largest gold miner by market value, slid 0.2 percent to C$20.82. Barrick Gold (TSE:ABX), the second-largest, rose 0.8 percent to C$13.98.
Spot gold, lower initially, was unchanged at $1,181.60 an ounce, while U.S. gold futures for August delivery were up $1.10 at $1,181.40 an ounce.
Financials, the index's most heavily weighted sector, fell 0.8 percent. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, skidded 0.4 percent to C$77.89. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, sank 1.2 percent to C$53.90.
Granite Real Estate Investment Trust (TSE:GRT.UN), the company renting industrial space to Magna International Inc., jumped 6.5 percent to C$42.70 after announcing it’s exploring a sale of some properties and other alternatives.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) was little changed at 682.32 at 12:32 p.m. in Toronto.
In economic news, Canadian home prices rose in May to a record high despite a drop in Calgary as weak oil prices continued to hurt demand in Canada's energy heartland, the Teranet-National Bank Composite House Price Index showed today.
Elsewhere in the economy, Canadian households kept debt at almost record levels in the first quarter, even as they benefit from rising asset values that saw their net worth rise to new highs. Credit-market debt including mortgages, consumer credit and non-mortgage loans was 163.3 percent of disposable income in the three-month period, compared with a revised record 163.6 percent in the fourth quarter, Statistics Canada said today. Household net worth rose 3.4 percent in C$8.65 trillion.
In the U.S. market, shares stretched losses today amid uncertainty about a Greek bailout deal. The S&P 500 (INDEXSP:.INX) fell 0.5 percent to 2,098.51 at 11:30 a.m. in Toronto. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 0.6 percent to 17,928.53, and the tech-heavy Nasdaq 100 (INDEXNASDAQ:NDX) was down 0.6 percent at 4,461.59. Most followed shares included Twitter, Wingstop, T-Mobile US, Restoration Hardware, LeapFrog Enterprises, FedEx, ITT Educational Services, Bob Evans Farms, Korn/Ferry International, ExOne, Pfizer, and Aveo.