Weaker oil and metals prices sent the Toronto stock market lower on Monday amid suggestions of further slowing in China’s economic growth.
The S&P/TSX composite index closed down 79.72 points at 13,758.38, while the commodity-sensitive Canadian dollar also took a hit. It pulled back 0.64 of a U.S. cent to 76.81 cents US.
Driving the decline was the TSX metals and mining sector, which dropped four per cent, while the gold sector was down three per cent.
Gold logged its steepest single day loss in more than two weeks. The December bullion contract was down $10.30 at US$1,172.80 an ounce, while December copper gave back four cents to US$2.37 a pound.
The TSX energy sector eased off three per cent as the November contract for benchmark crude oil retreated $1.37 to US$45.89 a barrel, while November natural gas added a penny to US$2.44 per thousand cubic feet.
Falling crude prices also affected energy companies on the U.S. markets, including Exxon Mobil and Chevron, which fell the most in the Dow Jones industrial average.
Overall, New York indexes were slightly higher, with the Dow rising 14.57 points to 17,230.54, the S&P 500 inching up 0.55 of a point to 2,033.66 and the Nasdaq moving ahead 18.78 points to 4,905.47.
Data released by China on Monday showed that growth in the world’s second-largest economy was the slowest since early 2009 in the aftermath of the global crisis.
Growth in China’s economy slowed to 6.9 % in the third quarter, down from 7.0 in the previous three-month period. Only relatively strong consumer spending averted a steeper downturn.
The slowdown in China has left traders skittish about the impact it could have on earnings for key U.S. and Canadian companies with an international presence.
Corporate Canada will also be keeping a close watch on the outcome of the federal election and potential ramifications it could have on the energy sector and other industries.
But few, if any, of those marks will be seen on the TSX in the short term, suggested Ian Nakamoto, director of research at 3Macs.
He said the parties most likely to rise to power haven’t been particularly specific when it comes to shifting business policies.
“Nothing brings to mind such a bold statement (that) is going to affect the market,” he said.
“Any tax policies would have to (be in) a budget, and then you’ve have to pass it, and that all takes a while.”
Nakamoto said he expects U.S. earnings and the direction of commodities prices to overshadow any fallout from the election.
Meanwhile, shares of heavily-weighted Valeant Pharmaceutical International (TSX:VRX) dropped after the company said it may sell its neurology business amid increased scrutiny political and legal scrutiny over soaring drug prices.
The pharma operator, one of Canada’s largest companies by market capitalization, saw its stock drop six per cent to $213.05.