Canadian shares fell to the lowest in more than a year as world markets plummeted with commodities amid growing concern China’s economic growth is slowing.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) sank 1.3% to 13,559.32 at 12:30 p.m. in Toronto. The measure touched 13,520.05, the lowest intraday price since February 4, 2014.
More than seven shares declined for every issue that advanced as nine out of ten share groups were in the negative territory. The gauge has retreated 7.3% this year.
The energy sector, the main index's second most heavily weighted group, lost 1.5% as oil, Canada’s largest export, slid on weak economic data out of China, the nation’s second-largest trading partner.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, was flat at C$34.23. Enbridge (TSE:ENB), Canada's largest pipeline company, added 0.8% to C$52.54.
Baytex Energy (TSE:BTE) fell 7.5% to C$6.13. The heavy-crude producer suspended its monthly dividend and projected a cut in its capital program next year as it is grappling with protracted oil price weakness.
Light, sweet crude for October delivery recently traded down 1% at $40.89 a barrel on the New York Mercantile Exchange.
The preliminary Purchasing Managers’ Index for China from Caixin Media and Markit Economics was at 47.1 in August, compared with a median estimate of 48.2 and the final reading of 47.8 the previous month.
The materials sub-index, which includes mining shares, dropped 1.4% as gold prices pulled lower. Eldorado Gold (TSE:ELD) tumbled 11.3% to C$4.62. The company confirmed it’s taking legal action against the Greek government over a decision to suspend technical studies at a subsidiary’s projects in northern Greece.
Goldcorp (TSE:G), Canada’s largest gold miner by market value, added 2.4% to C$20.74. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, advanced 0.5% to C$10.82.
Dominion Diamond (TSE:DDC) skidded 0.6% to C$16.88. The miner said diamond sales were a “robust” $209.7 million in the second quarter despite what it called a cautious market.
Gold for December delivery was recently down 0.1% at $1,151.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
Financials, the index's most heavily weighted sector, declined 1.2%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, slipped 1% to C$73.34. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, declined 0.9% to C$50.45.
In economic news, Canada's annual inflation rate rose to its highest level in seven months in July as higher prices for food and clothing offset the moderating effect of cheaper energy.
A separate report on Friday showed that Canadian retail sales rose faster than economists forecast in June, a sign the economy grew that month for the first time this year. Sales climbed 0.6 percent to a record C$43.2 billion, Statistics Canada said.
In the U.S. market, stocks are dropping sharply for a second day following a sell-off in major indexes around the world on growing evidence that China's economy is slowing.