By Siddarth S
(Reuters) -Toronto stocks started August on a dismal note, weighed by losses in materials and energy shares on weak commodity prices, while traders assessed Canada’s July manufacturing sector data.
At 10:17 a.m. ET (1417 GMT) on Tuesday, the Toronto Stock Exchange’s S&P/TSX composite index was down 84.12 points, or 0.41%, at 20,542.52. The index had hit a three-month high in the previous session.
Data showed Canada’s manufacturing sector contracted for the third straight month in July as an uncertain economic outlook held back new orders, offsetting a pickup in production.
The slowdown in factory activity has occurred after the Bank of Canada hiked its policy rate in July to a 22-year high of 5% and amid the country’s worst-ever spring wildfire season and a dock workers strike at its busiest ports.
“The markets are sort of wrestling with whether there might be one more rate hike before the end of the year, but suffice to say we are in the later stages of it,” said Brian Madden, chief investment officer at First Avenue Investment Counsel.
Heavily-weighted materials sector, which houses miners and fertilizer companies, dropped 1.4% as prices of base and precious metals slid on a firm dollar and poor demand outlook from top consumer China. [MET/L] [GOL/]
Shares of Silvercrest Metals plunged more than 16%, becoming the worst performer on the benchmark index, after two brokerages cut price target on the precious metals miner stock.
Oil fell on signs of profit-taking after rallying in July when investors wagered on tightening global supplies. Lower oil prices dragged the energy sector down 0.7%.
In the neighboring U.S., manufacturing appeared to stabilize at weaker levels in July, data showed, amid a gradual improvement in new orders.
(Reporting by Siddarth S in Bengaluru; Editing by Shilpi Majumdar)
