Canadian stocks ended a six-day winning streak to settle lower Thursday, as global equity markets slumped after investors reacted negatively to moves by central banks in Europe, China, and U.K. The decline was led mostly by resource stocks.
Toronto's main index, the S&P/TSX, closed Thursday at 11,816.91, down 96.96 points or 0.81 percent. The S&P/TSX Composite Index touched an intraday high of 11,894.81.
The TSX Venture Index closed at 1,226.45, down 15.45 points or 1.24 percent. The index opened at 1,233.00 compared to its previous close of 1,241.90.
Most major components of the S&P/TSX Index were in the red, led by the Energy and the Capped Materials indices.
Data from the EIA revealed that U.S. crude oil inventories declined 4.3 million barrels, while gasoline stocks edged up 200,000 barrels in the weekended June 29.
U.S. crude oil futures for August delivery, shed $0.44 or 0.5 percent to close at $87.22 a barrel Thursday on the NYMEX.
The Energy Index slipped 1.69 percent with Suncor Energy Inc. (SU.TO) down 2.35 percent and Canadian Natural Resources Limited (CNQ.TO) down 2.79 percent. Bankers Petroleum Ltd. (BNK.TO) surged 27.88 percent after providing its operational update.
Lundin Petroleum (LUP.TO) dived nearly 10 percent after announcing farmout agreements for PL490 and PL492 in the Barents Sea.
Gold futures for August delivery dropped $12.40 or 0.8 percent to close at $1,609.40 an ounce Thursday on the NYMEX. The Global Gold Index shed 1.10 percent.
Among gold stocks, Kinross Gold Corp. (K.TO) slipped 3.61 percent, while Barrick Gold Corp. (ABX.TO) moved down 0.75 percent. Goldcorp Inc. (G.TO) slipped 2.58 percent.
The Materials Index slipped 0.77 percent, but heavyweight Potash Corporation of Saskatchewan Inc. (POT.TO) edged up 0.11 percent.
The Metals & Mining Index dropped 0.36 percent with Inmet Mining (IMN.TO) dropping 2.47 percent. Lundin Mining Corp. (LUN.TO) gained 1.12 percent and Teck Resources Limited (TCK.B.TO) edging up 0.06 percent.
The Financial Index shed 0.38 percent with Royal Bank of Canada (RY.TO) down 0.35 percent, Bank of Nova Scotia (BNS.TO) edged up 0.07 percent, and Toronto-Dominion Bank (TD.TO) inching up 0.21 percent. Manulife Financial Corp. (MFC.TO) dropped 1.83 percent.
Heavyweight transportation systems maker Bombardier Inc. (BBD.B.TO) moved up 1.74 percent. Research In Motion Limited (RIM.TO) gained 4.87 percent.
The European Central Bank cut its main interest rate by a quarter-point to a record-low of 0.75 percent Thursday. The bank has never before adjusted rates to below 1 percent in the short history of the 17-nation currency block. Speaking to reporters, ECB President Mario Draghi justified the rate cut to a weak economic outlook and the absence of an inflation threat.
China also cut its interest rates in an unexpected move Thursday amid increasing signs of a slowdown in the economy. The People's Bank of China lowered the one-year deposit rate by 25 basis points, one-year lending rate was reduced by 31 basis points, and the reserve requirement ratio left unchanged.
Elsewhere, the Bank of England left its interest rate unchanged at 0.50 percent, while raising bond purchase program by GBP 50 billion to GBP 375 billion, as widely expected.
In economic news from the U.S., Automatic Data Processing said the private sector added 176,000 jobs in June following an upwardly revised increase of 136,000 jobs in May. Economists expected private sector employment to increase by about 95,000 jobs compared to the increase of 133,000 jobs originally reported for the previous month.
The Institute for Supply Management's monthly report on activity in the service sector showed continued growth in June. But the pace of growth slowed more than economists had been anticipating. The ISM's non-manufacturing index dropped to 52.1 in June from 53.7 in May, although a reading above 50 indicates continued growth in the service sector. Economists expected the index to edge down to 53.0.
Separately, the U.S. Labor Department said new unemployment claims fell more than expected for the final week of June. The claims dropped by 14,000 to 374,000 from the previous week's revised figure of 388,000.
From the eurozone, Germany's factory orders grew unexpectedly by 0.6 percent in May from a month ago, the Federal Ministry of Economy and Technology said. Economists expected orders to remain flat after easing 1.4 percent in April.
by RTT Staff Writer
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