Skip to content

S&P/TSX composite fall as price of gold drags down materials sector

gac10676702

TORONTO — Canada's main stock index lost more than 100 points Tuesday as the price of gold retreated and dragged down the materials sector on the Toronto Stock Exchange.

The S&P/TSX composite index shed 108.49 points to 16,497.01.

The materials sector, which includes the big gold miners, was the worst performing on the index. Shares in the sector lost, on average, 5.89 per cent of their value as the price of gold, which recently enjoyed multiple record-breaking days, plummeted.

The December gold contract retreated by US$93.40 to US$1,946.30 an ounce.

"I think generally you have risk-on sentiment today," said Natalie Taylor, portfolio manager at CIBC Asset Management.

"You're seeing a lot of strength in cyclicals and weakness in some of your defensive sectors."

The weaker, defensive sectors for the day included utilities — down 0.45 per cent — and technology — down 0.87 per cent. The health care sector also fell by 2.62 per cent, the second largest loss within a sector Tuesday.

Meanwhile strength appeared in sectors with cyclical stocks, she said, including the financial sector — up 1.45 per cent — and consumer discretionary — up one per cent. They were the two biggest gainers for the day on the Toronto Stock Exchange.

That risk-on sentiment came from Tuesday headlines that drive the feeling that the economy is continuing to recover from the COVID-19 pandemic, she said. That includes U.S. President Donald Trump announcing he's considering a capital gains tax cut, as well as Russia approving a coronavirus vaccine.

South of the border, major indexes also ended the day in the red.

The Dow Jones industrial average fell 104.53 points to 27,686.91. The S&P 500 index lost 26.78 points to 3,333.69, putting an end to seven straight days of gains that left it Monday within one per cent of breaking a February record.

The Nasdaq composite decreased by 185.53 points to 10,782.82 as it felt the weakness in technology stocks.

The Canadian dollar traded for 75.24 cents US compared with 74.88 cents US on Monday.

Elsewhere in commodities, the September crude contract fell 33 cents to US$41.61 per barrel and the September natural gas contract gained nearly two cents to US$2.17 per mmBTU. The September copper contract gained about a penny to nearly US$2.88 a pound.

— With a file from The Associated Press

This report by The Canadian Press was first published Aug. 11, 2020.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)

 

The Canadian Press




Comments