Canadian shares sank as downbeat economic from China, the nation’s second-largest trading partner, sparked global selloff and nudged down energy prices.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) tumbled 2.2% to 13,559.17 at 12:18 p.m. in Toronto. Ten shares declined for every issue that advanced as all of the 10 groups were in the negative territory.
China's official Purchasing Managers' Index (PMI) dropped to 49.7 in August from 50.0 in July, reinforcing concerns over the world's second-largest economy.
The energy sector, the main index's second most heavily weighted group, was the largest laggard with a 4.4% slump as oil prices sank as much as 8%.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, sagged 3.9% to C$35.83. Enbridge (TSE:ENB), Canada's largest pipeline company, slipped 2.6% to C$52.94.
Penn West Petroleum (TSE:PWT) declined 14% to C$0.890 after the oil and gas company said it would cut its workforce by 35%, suspend its dividend and scale back capital spending amid weak oil prices.
Pengrowth Energy (TSE:PGF) tumbled 12% to C$1.70 after the oil and gas producer said it is moving to a quarterly dividend payout of C$0.01 per share, down from a monthly payout of C$0.02 per share, citing continued weak commodity prices.
U.S. crude was down $3.91, or nearly 8%, at $45.29 a barrel. On Monday it settled up 8.8%.
The materials sub-index, which includes mining shares, retreated 1.7% even as gold rose 1% on Tuesday. Goldcorp (TSE:G), Canada’s largest gold miner by market value, added 0.4% to C$18.33. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, edged down 0.6% to C$9.10.
Financials, the index's most heavily weighted sector, lost 2.5%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, declined 2.6% to C$71.46.
Royal Bank of Canada (TSE:RY), the company with the highest weighting in the index, Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, lost 2.4% to C$51.21.
Valeant Pharmaceuticals International (TSE:VRX) dropped 2.1% to C$298.49. The acquisitive Canadian pharmaceutical company reached a deal with AstraZeneca PLC for the rights to sell psoriasis treatment brodalumab.
Alimentation Couche-Tard (TSE:ATD.B) advanced 2.6% to $57.17 after the largest public convenience-store operator in North America reported higher-than-expected earnings and revenue in its fiscal first quarter, helped by strong merchandise sales.
Cara Operations (TSE:CAO) rose 1% to C$33.48 The food services company said it has agreed to buy fast-food chain New York Fries for an undisclosed amount.
In economic news, Canada's manufacturing sector turned down again in August, with activity contracting as output and employment declined, data showed on Tuesday.
In the U.S., stocks joined a worldwide selloff amid continuing concerns that China’s slowdown will weigh on the global economy.