Canada's benchmark stock index fell for the ninth time in 10 sessions on Monday, falling below 13,000 for the first time since the end of November, as commodity prices declined.
With a close at 12,939.72 on Monday, the S&P/TSX composite index has fallen 9.3% from its peak of 14,270.53 reached in early April. The benchmark index lost 1.10%, or 144.28 points on the day.
All 10 of the sub-indexes fell, with materials, down 1.9% and energy, down 1.62%, leading the declines.
The price of West Texas Intermediate crude oil fell by US$1.99 to US$97.30 a barrel, while the European benchmark, Brent crude, fell US5¢ to US$118.83. The price of gold slipped US$13.60 to US$1,515.00 an ounce. The Canadian dollar, however, gained 16 basis points to close at US$1.0238 as the U.S. dollar declined.
One of the factors weighing on investor sentiment Monday was Standard & Poor's decision to downgrade Greece's credit rating, taking it to the lowest rating of any country in the world. Another was "dramatically" slower loan activity at Chinese banks, suggesting "that the measures taken by the People's Bank of China to slow its economy may be starting to take hold and appears to be weighing on copper in particular," said CMCMarkets analyst Co-lin Cieszynski in a note. Copper prices closed Monday at their lowest point in three weeks.
The coming week could bring more volatility, Cieszynski said, with key economic reports from China Monday night (consumer prices, producer prices, industrial production) and the U.S. on Tuesday (producer prices, retail sales). The U.K. also reports consumer prices on Tuesday.
"People are just moving their risk capital to safer havens and trying to stand back and see what comes out of this," Brian Pow, a research and equity analyst at Acumen Capital Partners in Calgary, told Reuters.
"I'm of a view we're in a sideways market, so we could possibly go lower, but . . . as the volumes pick up again and as companies report some of their Q2 numbers later in the summer, I think it will prove that some of this current concern is not needed."
The Dow Jones industrial average closed just above flat, eking out a 1.06-point gain, or 0.01%, to 11,952.97, and the Nasdaq composite edged downward by 4.04 points, or 0.15% to 2,639.69.
The top five declining stocks on the S&P/TSX on Monday were Goldcorp, down 2.49% to $45.05; Potash Corp. of Saskatchewan, which fell 1.89% to $52.87; Encana, which slipped 2.98% to $30.75; Canadian Natural Resources, down 1.86% to $38.61; and Suncor, which lost 1.26% to close at $37.59.
