Canada's main stock index, the S&P/TSX composite, declined on Thursday as the price of oil fell, dragging energy shares lower. The index lost 120 points, or 0.6%, to close at 22,340, with losses in energy, financials, and materials sectors.
Energy Sector Hit by Falling Oil Prices
The energy sector was the biggest laggard, falling 1.8% as crude oil prices dropped amid concerns about global demand. U.S. crude oil futures fell $1.50 to $78.20 per barrel, while Brent crude, the international benchmark, declined $1.40 to $82.60 per barrel.
Shares of major oil producers such as Suncor Energy, Canadian Natural Resources, and Cenovus Energy all declined by more than 2%. The drop in oil prices was attributed to rising U.S. crude inventories and worries about slowing economic growth in China, the world's largest oil importer.
Financial and Materials Sectors Also Decline
The financial sector fell 0.5%, with shares of Royal Bank of Canada, Toronto-Dominion Bank, and Bank of Nova Scotia all trading lower. The materials sector, which includes mining and forestry companies, declined 0.7% as gold and copper prices also fell.
Gold prices slipped 0.3% to $1,950 per ounce, while copper prices dropped 1.2% to $3.80 per pound. The declines in commodity prices weighed on shares of mining companies such as Barrick Gold and Teck Resources.
Market Outlook
Investors are closely watching central bank policy decisions and economic data for clues about the direction of interest rates. The Bank of Canada is expected to hold its key interest rate steady at 4.5% next week, but markets are pricing in a rate cut later this year.
In corporate news, Apple CEO Tim Cook said that the boom in artificial intelligence makes price increases unavoidable, which could impact consumer spending. Meanwhile, CPP Investments committed $1 billion to a data centre partnership in India, signaling continued investment in technology infrastructure.
The Canadian dollar traded at 73.5 cents U.S., down from 73.8 cents on Wednesday, as the greenback strengthened against a basket of currencies.
