TORONTO: Canada’s main stock index fell on Monday as lower oil prices weighed on energy stocks, offsetting a jump in the shares of Manitoba Telecom Services Inc on news of the company’s acquisition by BCE Inc.
Oil prices fell as production from the Organization of the Petroleum Exporting Countries neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month’s outsized rally.
U.S. crude prices settled at $44.78 a barrel, down 2.48 percent.
“Oil has been under a little bit of pressure today … I think you are seeing that in some of the oil stocks,” said Bryden Teich, associate portfolio manager at Avenue Investment.
The most influential movers on the index included Suncor Energy Inc, which fell 3.4 percent to C$35.58, and Canadian Natural Resources Ltd, which declined 2.7 percent to C$36.66.
The overall energy group dropped nearly 3 percent.
Gold stocks retreated as gold eased back below $1,300 an ounce after having made a fresh 15-month peak.
Goldcorp Inc fell 3.2 percent to C$24.47, while Barrick Gold Corp was down 1.4 percent at C$23.96.
The financials group fell 0.4 percent, including a nearly 1 percent drop in the shares of Bank of Nova Scotia to C$65.17.
Investor re-positioning at the start of the new month and the decline in oil prices weighed on the sector, said Teich.
The Toronto Stock Exchange’s S&P/TSX composite index closed down 85.82 points, or 0.62 percent, at 13,865.63. Just four of the index’s 10 main groups ended lower.
The index ended 3.4 percent higher for the month of April, and has rebounded 20 percent from an almost 3-1/2-year low in January, though it has been unable to climb back above 14,000.
In order for that to happen oil needs to stabilize or move higher from these levels and more positive economic data needs to be seen from Canada, said Teich.
He expects reduced U.S. production to help oil trade higher over the coming months.
Telecom and media company BCE Inc said it would buy Manitoba Telecom Services Inc for about C$3.1 billion to expand in the western Canadian province. Manitoba Telecom jumped 15.3 percent to C$37.85, while the overall telecoms group rose 3.9 percent.
Shares of Air Canada rose 4.5 percent to C$9.75. It follows a 12.7 percent advance on Friday after the company reported a first-quarter profit compared with a loss a year earlier, helped by a decline in fuel costs.
