The Toronto Stock Exchange saw its biggest daily decline in more than two weeks Tuesday, dragged down by the energy sector.
The S&P/TSX composite index closed down 138.14 points, or 1.16%, at 11,797.94. Materials and financials -- which together with energy make up about three-quarters of the composite index -- were also negative.
The junior TSX Venture composite index was down 15.09 points, or 1.02%, to 1,457.94
The main TSX was down slightly most of the day, but losses accumulated quickly late in the afternoon. The Canadian energy sector seemed to partially follow the lead of oil and gas stocks in the U.S., which declined after a judge overturned a six-month moratorium on deep-sea oil drilling in the U.S.
The Obama administration imposed the ban in response the Deepwater Horizon explosion April. The White House said it would appeal.
Looking at some of the bellwether Canadian energy stocks, Suncor Energy Inc. was down 2.35%to $33.73, while Talisman Energy Inc. fell 2.09%to $17.32.
Still, BMOCapital Markets economist Robert Kavcic said it's not clear how much of a role developments in the U.S. oil spill played in the major sell-off of energy stocks on North American markets on Tuesday.
"It's possible to the extent it creates some uncertainty in the sector," he said. "But you're seeing a similar-sized decline in Canadian energy stocks (as U.S. energy stocks). You can almost expect Canadian energy stocks -- those that just operate in the oilsands -- to be beneficiaries to what is happening in the Gulf ... to the extent that it pulls activity into areas like Alberta."
On the New York Mercantile Exchange, crude oil was down 61¢ to US$77.21 a barrel on Tuesday, while gold rose 20¢ to US$1,239.80 an ounce.
The Canadian dollar was down 45 basis points to US97.17¢.
Statistics Canada on Tuesday said the country's consumer prices were up 1.4% in May compared to a year earlier, down from 1.8% in April. The core inflation rate was 1.8%, down from 1.9% the previous month.
South of the border, the National Association of Realtors said home resales were down 2.2% to an annual rate of 5.66 million last month. Economists were expecting sales to rise to 6.12 million.
U.S. markets also took a turn for the worse late in the day. After being in positive territory most of the day, the Dow Jones industrial average closed down 148.89 points, or 1.43%, to 10,293.52. The Nasdaq composite index was off 27.29 points, or 1.19%, to 2,261.80. European and Asian markets were also down Tuesday.
