CANADA STOCKS-Toronto Stock Exchange slips as gold, mining firms tumble
By Purvi Agarwal and Promit Mukherjee
March 19 (Reuters) - Canada's main stock index slipped on Thursday as an escalation in the Middle East conflict following attacks on energy infrastructure in the region added to inflation concerns, causing sharp declines in gold, silver and other mining shares.
A moderate easing of U.S. crude oil prices later in the day helped the market pare some losses.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 1.42% at 31,854.98, its lowest level since February, bringing the index’s total decline to over 7% since the start of the Iran war.
The materials sector .GSPTTMT, which includes gold and mining stocks, plunged by more than 5% to its lowest level this year.
Gold miners .SPTTGD led the decline with a drop of 6%, largely due to a rout in small gold mining companies, which fell between 8% and 12%. Spot gold prices XAU=, which scaled an all-time high of almost $5,400 per ounce at the end of January, fell 3.2% to $4,657 per ounce. GOL/ MET/L
"Today ... it's all gold. The gold is crushed and tumbled," said Barry Schwartz, chief investment officer at Baskin Wealth Management.
Brent crude futures LCOc1 pared gains after jumping above $119 a barrel after Iran attacked energy facilities across the Middle East following Israel's strike on its South Pars gas field. Brent settled at $108.65 per barrel, up 1.2%. U.S. crude CLc1 settled down slightly.
Energy stocks posted a big jump with the index .SPTTEN up almost 3.37% and companies seeing a healthy surge in share prices. Canada is a net exporter of oil and higher prices benefit the companies and government.
"Those things (oil and mining) are notoriously very, very speculative and could move quickly," Schwartz said, adding if the Iran conflict does not last long, that could be a good buying opportunity for investors outside of the commodity sector.
Rising oil prices and no sign of ending the Iran war have eroded risk appetite, with the malaise spreading beyond the mining sector.
The index-heavyweight financial sector .SPTTFS, industrials .GSPTTIN and real estate .GSPTTRE all lost more than a percentage point on Thursday, TSX data showed.
Royal Bank of Canada RY.TO dropped by 1.21% while TD Bank TD.TO shed 0.67%.
