TORONTO – The Toronto stock market took a break Wednesday following five straight sessions of gains amid signs that global oil supplies continue to grow.
The S&P/TSX composite index lost 26.19 points at 14,775.04, led by declines in energy and real estate stocks.
Crude prices slid after a report showed a bigger than expected increase in U.S. stockpiles last week. The September crude contract was down $1.06 at US$41.71 per barrel.
“The general notion is that the supply glut might be here to stay,” said Paul Vaillancourt, executive vice-president at Fiera Capital Private Wealth in Calgary.
He noted that although the TSX may be taking a pause, it continues to outperform for the year — an especially commendable feat considering the markets are in the middle of the summer doldrums when trading volumes are low.
“The TSX is up 12 per cent year-to-date as of the end of July,” said Vaillancourt, noting that gain is double that of the S&P 500 in New York.
“Canada continues to be the darling and that’s welcome news after five years of underperformance.”
Supportive monetary policies from global central banks, and little to no impact from the U.K. vote to leave the European Union, has been good for stock markets in recent months.
But Vaillancourt added that most traders are expecting an impending pullback in the Toronto market. Still, this can be viewed as a good stock buying opportunity, he said.
“Any sort of bad news or negative news is going to push the markets down a little bit,” he said.
Lower oil prices seemed to leave the loonie unscathed as the U.S. dollar weakened. The Canadian dollar added 0.35 of a U.S. cent to 76.55 cents US.
New York was also negative as the Dow Jones industrial average fell by 37.39 points at 18,495.66, the broader S&P 500 composite index declined 6.25 points to 2,175.49 and the Nasdaq composite dropped 20.90 points to 5,204.58.
Investors are reluctant to make any major moves as they await for the latest gauge in the U.S. economy with retail sales figures due out on Friday.
In other economic news, Japan’s government said earlier in the day that the country’s core private-sector machinery orders grew a seasonally adjusted 8.3 per cent in June from May, a rebound from two straight months of decline. The data was seen as encouraging, though business investment remained weak in the April-to-June quarter.
In commodities, the volatility in stock markets helped push up the December gold contract by $5.20 to US$1,351.90 an ounce. Bullion is often viewed as a safe haven play in times of stock market declines.
September copper contracts rose two cents to US$2.17 a pound and September natural gas was down five cents at US$2.56 per mmBTU.
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