Canadian stock market snaps 9-day losing streak

From:English.news.cn | 2016-01-13 09:32

TORONTO, Jan. 12 (Xinhua) -- Canada's main stock market in Toronto bounced back into positive territory on Tuesday after falling for nine consecutive sessions, though both oil prices and the Canadian dollar hit 12-year lows.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index gained a modest 54.65 points, or 0.44 percent, to close at 12,373.90 points. Six of the TSX index's eight main sectors finished with gains.

Metals and mining sector saw a second day of sharp loses, posing a 5.18 percent drop. Heavily traded miners Rubicon Minerals Corporation and Quantum Minerals Ltd were lower 40.00 percent and 8.85 percent, respectively.

With a retreat in gold prices, gold miners B2Gold Corp and Barrick Gold Corporation declined 2.50 percent and 2.76 percent, respectively.

Eldorado Gold Corporation, a Vancouver-based gold mining company with operations in Asia, Europe and South America saw a 19.04 percent dip to 3.53 Canadian dollars a share after the CEO announced that operations would be suspended after the Greek government revoked the corporation's mining permit due to environment concerns.

The financial sector inched up 0.61 percent, with stocks of the country's largest banks in the green. Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal gained 1.97 percent, 0.72 percent and 0.77 percent, respectively.

At one point in the day, the Canadian dollar fell below 0.70 U.S. dollar, the first time it has reached the level since April 2003.

Experts in the food industry believe that the further weakening of the Canadian dollar will lead to a surge in food prices.

In an annual report released by the Food Institute of Guelph University, an Ontario-based educational institute, the costs of vegetables, fruits, and nuts are items most vulnerable to a weakened currency.

The report expects as much as a 4.5-percent increase in food costs in 2016 for Canadians and that the impact of a one cent drop in the Canadian dollar will result in at least a one percent increase in the price, said Dr. Sylvain Charlebois, the report's lead author.

Energy sector retreated 0.64 percent during the session, as crude oil prices continued to drop. Calgary-based Encana Corporation and Canadian National Resources Limited both declined 2.69 percent and 3.14 percent, respectively.

Meanwhile, Finance Minister Bill Morneau told Montreal reporters that despite the recent drop in oil prices and the country's currency, the federal government will continue their plan to invest into the economy.

"I know Canadians are concerned about the changes in the value of the Canadian dollar. It's important for all Canadians. We think it's more important to make investments in our economy. So economic growth is very important and that's how we can improve our economic situation," said Morneau.

Morneau is in the second day of a six-day tour across Canada to consult with stakeholders from various industries before finalizing the newly elected government's first budget.

Michael J. Smith, a Toronto currency report expert at AFEX, a global non-bank provider of foreign currency services, believes that falling gas prices may put the country in a larger deficit than originally anticipated.

"Most Canadian governments are using an oil price of between 50 to 60 U.S. dollars to create their budgets for this year, it now looks like those numbers are farfetched," said Smith.

"If oil stays around the 30 U.S. dollars a barrel price for any significant time this year then Canadians are going to be in for much bigger deficits than previously reported and a lot of credit rating agencies will start to revise out bond ratings."

The Canadian dollar closed at 0.7013 U.S. dollar, compared with Monday's closing rate of 0.7031 U.S. dollar.