Canadian shares dropped as energy producers sank after Greek voters rejected austerity measures, endangering the country's future in the euro zone and darkening overall market sentiment.
The Standard & Poor’s/TSX Composite Index (TSE:OSPTX) retreated 0.5 percent to 14,616.88 at 12:39 p.m. in Toronto. Two shares declined for every issue that advanced as eight out of ten share groups were in the negative territory.
Greek voters yesterday overwhelmingly rejected their international creditors’ conditions for providing much-needed monetary aid. The referendum is seen significantly raising the chances Greece will exit European currency bloc.
Financials, the index's most heavily weighted sector, lost 0.4 percent. Fairfax Financial Holdings (TSE:FFH) slipped 0.9 percent to C$646.40 as the holding company is exposed in several ways to Greece’s struggling economy.
Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, skidded 0.1 percent to C$76.61. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, fell 0.5 percent to C$53.32.
The energy sector, the main index's second most heavily weighted group, dropped 1.1 percent as U.S. oil futures sank to their lowest level in more than two months.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, skidded 0.5 percent to C$34.42. Enbridge (TSE:ENB), Canada's largest pipeline company, fell 1.3 percent to C$57.70.
Husky Energy (TSE:HSE) rose 0.5 percent to C$24.03. Canada's third-largest integrated oil producer’s Sunrise Energy Project in northeast Alberta continues to increase its production.
August crude dropped 4.6 percent to $54.29 a barrel on the New York Mercantile Exchange.
The materials sub-index, which includes mining shares, advanced 0.6 percent as gold futures edged higher.
Goldcorp (TSE:G), Canada’s largest gold miner by market value, added 1.7 percent to C$20.93. Barrick Gold (TSE:ABX), the second-largest, gained 2.7 percent to C$13.76.
Gold for August delivery on Comex rose 0.3 percent to $1,166.20 an ounce.
Stingray Digital Group (TSE:RAY.A) sank 1.5 percent to C$7.25. National Bank started coverage of Stingray at outperform and set a target price of C$10. The music and media provider’s stock last traded at C$7.36.
Loblaw (TSE:L) fell 0.8 percent to C$63.93. Canada’s biggest grocery store chain reached an amended labor agreement for 69 stores across Ontario, delaying expected strikes at dozens of the grocery company’s locations.
The junior S&P/TSX Venture Composite Index (CVE:OSPVX) fell 0.7 percent to 666.06. at 12:14 p.m. in Toronto.
In economic news, current Canadian business sentiment paints a picture of two economies, according to a Bank of Canada report today, with cheap oil depressing the outlook in petroleum-related industries, but with some promising signs elsewhere.
Elsewhere, purchasing activity in Canada fell in June as inventories dropped and employment edged lower, according to Ivey Purchasing Managers Index data released today.
In the U.S. market, shares tumbled in early trade today as investors world-wide dumped risky assets such as equities following Greece’s overwhelming rejection of bailout terms. The S&P 500 (INDEXSP:.INX) slid 0.3 percent to 2,071.16 at 11:44 a.m. in New York. The 30-company Dow Jones Industrial Average (INDEXDJX:.DJI) fell 0.2 percent to 17,687.32, while the tech-heavy Nasdaq Composite (INDEXNASDAQ:.IXIC) retreated 0.3 percent to 4,993.99. Most followed shares included Allergan, BofA, Citi, JPMorgan, Humana, Aetna, Philip Morris, TripAdvisor, Guess, Harley-Davidson, Chipotle Mexican Grill, Dollar Tree, and American Apparel.