Canadian shares tumbled, led by energy producers, hit by a sharp drop in crude prices on the heels of China's unexpected devaluation of the yuan.
The resource-sensitive benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) fell 1.3 percent to 14,279.12 at 11:58 a.m. in Toronto. Four shares declined for every issue that advanced as nine out of ten share groups were in the negative territory. The gauge is down 6.5 percent this year.
China's move triggered the yuan's biggest fall since 1994, pushing it to its weakest against the U.S. dollar in almost three years.
The energy sector, the main index's second most heavily weighted group, lost 2.2 percent as U.S. crude briefly dipped below $43 for the first time since March.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, slipped 1.5 percent to C$37.14. Enbridge (TSE:ENB), Canada's largest pipeline company, surrendered 0.9 percent to C$55.60.
Northern Blizzard Resources (TSE:NBZ) fell 4.3 percent to C$4.51 after the oil and gas cut its dividend by half, to C$0.04 per share. Revenue and cash flow fell from a year earlier.
Emera (TSE:EMA) rose 2.8 percent to C$44.19 as the energy and services company reported adjusted earnings improved to C$48 million from C$44.2 million. Emera also increased its annual dividend by 19 percent to C$1.90.
U.S. crude fell nearly 4 percent to $43.25 a barrel, after touching a session low of $42.98. Front-month Brent futures were down 2.9 percent at $48.94 a barrel.
The materials sub-index, which includes mining shares, gave up 0.9 percent even as gold rose to a three-week high. Goldcorp (TSE:G), Canada’s largest gold miner by market value, gained 0.9 percent to $18.83. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, lost 0.6 percent to C$9.84.
Franco-Nevada (TSE:FNV) added 0.3 percent to C$56.29, reversing an earlier loss. The gold royalty and streaming company reported second-quarter earnings of $21.6 million, down 41.5 percent from a year earlier but in line with analyst expectations.
Spot prices rebounded to a three-week high of $1,119 before trading up 0.3 percent at $1,107.31 an ounce. U.S. gold for December delivery rose 0.5 percent to $1,109.10 an ounce.
Financials, the index's most heavily weighted sector, retreated 1.3 percent. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, decreased 1.5 percent to C$76.11. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, gave back 1.5 percent to C$52.45.
RONA (TSE:RON) gained 2.6 percent to C$15.39. The home renovation and construction company’s retail same-store sales rose 5.4 percent and revenue was slightly higher than a year earlier, at C$1.3 billion.
Aecon Group (TSE:ARE) leaped 11 percent to C$11.79. The construction company swung to a profit of C$12.4 million in the second quarter from a loss of C$12.2 million a year earlier.
In economic news, Canadian housing starts fell more than expected in July from June but were broadly in line with demographic fundamentals and analysts said housing remained a bright spot in Canada's otherwise sluggish economy.