Canadian shares fell in morning trades as investors await the Federal Reserve decision later this week and amid slumping commodity prices, under pressure from the latest sluggish data out of China.
The Standard & Poor’s/TSX Composite Index (TSE:OSPTX) fell 0.4% to 13,408.06 at 10:32 a.m. in Toronto. Two shares declined for every issue that advanced as seven out of ten share groups were in negative territory.
At a two-day Fed meeting starting on Wednesday, officials will weigh whether to raise interest rates for the first time in nearly a decade.
The materials sub-index, which includes mining shares, was the largest laggard with a 0.8% slump even as gold futures traded modestly higher on Monday.
Goldcorp (TSE:G), Canada’s largest gold miner by market value, skidded 0.3% to C$16.71. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, lost 2.6% to C$8.21.
Tembec (TSE:TMB) jumped 8.2% to C$1.06, paring this year’s loss to 62%. The Lumber company said it is evaluating market conditions and is in talks with certain investors. It also provided guidance for fourth-quarter operating earnings in the range of C$19mln to C$22mln, compared with an operating loss in the third quarter. Further, the stock was upgraded to “hold” from “reduce” at TD, which described guidance as encouraging.
Gold for December delivery added 0.2% to trade at $1,105.40, after capping its third straight weekly loss on Friday.
The energy sector, the main index's second most heavily weighted group, retreated 0.6% as oil, Canada’s largest export, slid on Monday.
Suncor Energy (TSE:SU), Canada's largest oil sands producer, inched down 1.3% to $33.65. Enbridge (TSE:ENB), Canada's largest pipeline company, fell 0.7% to C$51.55.
Light, sweet crude for October delivery recently traded down 1.4 percent at $44.02 a barrel on the New York Mercantile Exchange. Oil fell as concern that China’s slowdown will deepen added to concerns that the global oversupply will continue through most of next year.
Financials, the index's most heavily weighted sector, rose 0.3%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, inched up 0.2% to C$72.52. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, was flat at C$51.81.
Legumex Walker (TSE:LWP) more than doubled to C$2.14 after saying it has agreed to sell the assets of its special crops division to U.S. agricultural marketing company Scoular Co. in a deal valued at about C$174.6mln. Legumex said the sale allows it to wind up its operations and will result in a distribution to shareholders in the range of C$2.50 and C$2.75 a share.
SNC-Lavalin Group (TSE:SNC) fell 1.5% to C$38.53. Canada’s largest engineering company named chief operating officer Neil Bruce to replace Robert Card as chief executive officer next month.
In economic news, Canada has ended a run of consecutive deficits dating back to the global recession. The government ran a surplus of C$1.9bn for the fiscal year that ended March 31, according to the finance department’s Annual Finance Report released Monday.
Meanwhile, the Teranet-National Bank Composite House Price Index showed on Monday that Canadian home prices rose in August from a month ago, the eighth straight monthly increase, to hit another record high as gains in key markets offset losses in others.