Canadian shares stretched their rout as U.S. oil prices hit their lowest in almost six and half years, nudging down Canadian energy producers.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) declined 1.1% to 14,044.03 at 12:03 p.m. in Toronto. Five shares retreated for every issue that advanced as nine out of ten share groups were in the negative territory.
The energy sector, the main index's second most heavily weighted group, was the largest laggard with a 4.3% slump. Suncor Energy (TSE:SU), Canada's largest oil sands producer, gave back 2.9% to C$35.29. Enbridge (TSE:ENB), Canada's largest pipeline company, lost 1.8% to C$54.23.
U.S. crude oil futures tumbled on Wednesday after U.S. data showed an unexpected rise in crude stockpiles. The contract, also known as West Texas Intermediate (WTI), fell $1.75 to $40.87 by 11:54 a.m.. The contract earlier fell to $40.74, the lowest level since March 3, 2009, when WTI touched $39.44. North Sea Brent crude was down $1.48 at $47.33 a barrel after dipping below $47.
U.S. crude stocks were up 2.6 million barrels at 456.21 million barrels last week, the U.S. Energy Information Association (EIA) said on Wednesday. Stocks at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose 326,000 barrels to 57.44 million.
Financials, the index's most heavily weighted sector, fell 1.1%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, skidded 0.4% to C$75.32. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, lost 0.8% to C$51.92.
TMX Group (TSE:X) skidded 0.4% to C$47.41. The operator of the Toronto Stock Exchange said it got regulatory approval for its Long Life order type on the Toronto Stock Exchange.
The materials sub-index, which includes mining shares, rose 1.2% as gold prices rose 1% on Wednesday. Goldcorp (TSE:G), Canada’s largest gold miner by market value, advanced 4% to C$20.06. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, gained 3.7% to C$10.34.
Alamos Gold (TSE:AGI) surged 12% to C$5.45. CIBC World Markets Inc. upgraded the producer of the metal in Mexico to sector outperformer following what it called a “solid quarter.” CIBC maintained its target price of C$8.
U.S. gold futures for December delivery were up $8.80 an ounce at $1,125.70.
Uni-Select (TSE:UNS) rose 0.8% to C$58.45. The automotive products distributor has agreed to buy one of its longtime customers, C.B. Hoare Auto Parts Ltd. Uni-Select said the deal will give the company its first corporate locations in Atlantic Canada.
In the U.S. market, shares sold off as crude-oil prices plunged to new lows, weighing on the energy sector.