Canadian shares dropped more than 1 percent as stock markets around the globe retreated on worries further devaluation of the yuan may slow down global growth.
The Standard & Poor’s/TSX Composite Index (TSE:OSPTX) gave up 1.3 percent to 14,232.80 at 12:53 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 People's Bank of China (PBOC) today set the yuan's midpoint rate lower than yesterday's closing market rate, resulting in nearly a 4.0 percent devaluation of the yuan in two days against the U.S. dollar.
The consumer discretionary group, the fifth heaviest on the index, was the largest lagger with a 2.5 percent drop.
Air Canada (TSE:AC) tumbled 6.9 percent to C$12.01 after its second-quarter revenue fell short of analysts’ expectations.
Metro (TSE:MRU) lost 1.4 percent to C$35.98, reversing an earlier gain. Canada's third largest grocery chain reported a 13 percent rise in third-quarter earnings. Sales rose 6 percent to C$3.8 billion, while same-store sales rose 4.3 percent.
The industrials group, the fourth heaviest on the index, retreated 2.2 percent. CAE (TSE:CAE) fell 4.8 percent to C$14.65. The maker of flight simulators reported better-than-expected results in its fiscal first quarter and said it will eliminate 350 jobs.
Magellan Aerospace (TSE:MAL) dipped 11 percent to $17.42 even as the aerospace systems manufacturer reported profit rose 21 percent to C$16.5 million in the second quarter and revenue improved 6 percent to C$234.4 million.
The financials group decreased 1.7 percent. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, sagged 1.8 percent to C$75.20. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, gave up 1.5 percent to C$52.18.
The energy sector, the main index's second most heavily weighted group, fell 1.1 percent.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, skidded 1.1 percent to C$37.32. Enbridge (TSE:ENB), Canada's largest pipeline company, slid 1.3 percent to C$54.92.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September fell 0.2 percent to $42.98 a barrel, after trading as high as $43.87 earlier in the session.
The materials sub-index, which includes mining shares, gained 0.9 percent as gold rose for a fifth session. Goldcorp (TSE:G), Canada’s largest gold miner by market value, added 3.2 percent to C$19.59. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, strengthened 3.3 percent to C$10.38.
In economic news, the Teranet-National Bank Composite House Price Index showed today that Canadian home prices rose in July from the previous month, the seventh consecutive monthly increase, to hit another record level despite weakness in nearly half of the cities surveyed.