TORONTO – Energy stocks helped pull the Toronto stock market lower Thursday as oversupply concerns pushed down crude oil prices.
The S&P/TSX composite index declined 88.31 points to 14,873.93.
The April crude oil contract in New York fell 70 cents to US$43.96 a barrel and the energy sector gave back 2.75 per cent.
Oversupply concerns have hit prices hard recently with crude down 14 per cent over the past eight sessions as inventories continue to climb. U.S. oil stockpiles rose by 9.6 million barrels last week — much more than expected. The latest worry is that oil storage space is becoming full, which could further depress prices.
“Once that is gone then what are you going to do with it?” said Philip Petursson, director of institutional equities at Manulife Asset Management.
“There’s no refining capacity, so essentially we’re going to have to see production come down or people are going to have to sell it at a deep discount to the current price.”
The Canadian dollar gave back a good-sized chunk of a 1 1/4-cent surge Wednesday after the Federal Reserve’s much-anticipated rate announcement. The loonie was down 0.97 of a US cent to 78.58 cents Thursday.
The Fed signalled it wants to see the job market improve and inflation to come off its lows before it begins raising rates.
New York markets had rallied in the wake of the Fed announcement Wednesday, but on Thursday the Dow Jones industrials lost 117.16 points to 17,950.03 and the S&P 500 index declined 10.23 points to 2,089.27. The Nasdaq rose 9.55 points to 4,992.38.
On the TSX, selling pressure also came from the base metals component, which fell 1.4 per cent even as the May copper contract gained nine cents to US$2.66 a pound.
The gold sector added 0.2 per cent with the April bullion contract ahead $17.70 to US$1,169 an ounce. The market also found support from consumer discretionary companies and the tech sector.
On the corporate front, Potash Corp. of Saskatchewan (TSX:POT) fell $1.23 to $41.14 as it said that the Saskatchewan government’s 2015-2016 budget is expected to hurt its 2015 pre-tax earnings to the tune of $75 million to $100 million. The province is dealing with sharply lower oil revenues and will require potash mining companies to take tax deductions based on their capital spending over a longer period of time, which would boost provincial revenue by $150 million.
U.S. retailer Target has proposed to pay US$10 million to settle a class-action lawsuit brought against it following a massive data breach in 2013. The retailer says individuals affected by the breach could be reimbursed up to a maximum of $10,000.