TORONTO – The Toronto Stock Exchange closed lower Thursday, led by declines within the metals and mining and gold sectors, as the loonie continued its slide, hitting its lowest closing price in additional than a decade for the second day consecutively.
The S&P/TSX composite index fell 41.75 suggests close at 14,265.37.
The metals and mining sector from the TSX was the biggest decliner, losing almost five per cent, followed by the global gold segment, which lost 3.8 percent. Energy and financials also slipped, while healthcare, consumer staples and telecom sectors closed higher.
Meanwhile, the loonie inched 0.01 of the cent lower to 76.69 cents US, replacing Wednesday\’s close as its lowest closing price since Sept. 1, 2004.
In Ny, markets closed lower following lacklustre earnings reports from 3M and Caterpillar.
The Dow Jones industrial average fell 119.12 points to 17,731.92, as the Nasdaq lost 25.36 points to close at 5,146.41 and the S&P 500 slipped 12 points, ending the day at 2,102.15.
\”It\’s really dominated by the quarterly earnings results that are going on at this time,\” said Mark Allen, vice-president of Canadian equities at RBC Wealth Management.
The September contract for crude oil was down 74 cents at US$48.45, as investors braced for lower demand stemming from weak global economic conditions and a glut of supply from Iran.
Iran recently reached an offer with global powers over its nuclear program, which will result in economic sanctions being lifted. The nation is planning to boost its production of oil, but Allen says it could take some time before that oil gets to market.
\”There could be technical issues with regards to the reservoir,\” Allen said.
\”For three years they\’ve been producing in regards to a million barrels each day less than these were before the sanctions. Once the fields are left for three years in a row, they might have to stimulate the reservoirs or repair or update the facilities which are in place in order to ramp up the development. It might take them some time to do that.\”
Despite the negative impact of low crude prices on the oil-heavy TSX, it isn\’t all not so good news, Allen said.
\”From my perspective, lower oil costs are actually really positive for delivering a recovery in oil eventually, because it tends to mean there is less spending going on,\” he explained.
\”The companies, if they are evaluating their budgets and looking at a low oil price, will be more conservative within their approach to spending. Ultimately this is exactly what will contribute to establishing a market balance.\”
Meanwhile, the August natural gas contract was down 8.1 cents at US$2.816 as the August gold contract rose $2.60 to at US$1,094.10.