A trader works on the floor of the New York Stock Exchange shortly before the opening bell April 27. (Brendan McDermid/Reuters)
Canada’s main stock index fell sharply on Thursday as its heavyweight banking and energy sectors took heavy losses, with oil prices weighing and an alternative lender’s troubles putting the domestic housing market in focus.
Home Capital Group Inc said it had hired bankers to help it secure additional funding and size up its strategic options, as the subprime lender reported a further sharp decline in its assets amid a security regulator’s probe into its disclosures.
Its shares popped 13.9 per cent to $6.82, offsetting some of Wednesday’s 60-per-cent plunge, but the broader financial group – which accounts for a third of the index’s weight – fell 1.8 per cent.
“People are concerned that maybe this is the tip of the iceberg for the housing market,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
Royal Bank of Canada, the country’s biggest bank, fell 1.8 per cent to $93.77, while Toronto-Dominion Bank lost 1.6 per cent to $64.70 and Bank of Nova Scotia shed 2.9 per cent to $75.20.
Canada’s federal housing agency said on Wednesday that Toronto still faces price acceleration, overvaluation and overheating. Ontario’s provincial government earlier this month set a tax on foreign buyers amid a host of measures designed to cool Toronto prices.
The Toronto Stock Exchange’s S&P/TSX composite index was down 166.22 points, or 1.06 per cent, to 15,483.32.
The energy group – which account for another 20 per cent of the index’s weight – retreated 2.5 per cent as oil prices fell on news that two key oilfields in Libya had restarted, pumping crude for export into an already bloated market.
Canadian Natural Resources Ltd fell 3.9 per cent to $43.30 and Encana Corp also shed 3.9 per cent, to $14.15.
Canada’s largest oil and gas company, Suncor Energy Inc advanced 0.4 per cent to $41.78 after reporting better-than-expected profit.
Fertilizer company Potash Corp of Saskatchewan advanced 2.7 per cent to $23.27 after reporting a beating profit expectations and upping its full-year outlook.
Its rival and planned merger partner Agrium advanced 2.6 per cent to $129.64.
The Nasdaq hit a record intraday high on Thursday, powered by a string of strong earnings from technology companies, while the S&P 500 and the Dow were little changed.
Investors shifted their focus back to earnings, a day after the Trump administration unveiled a tax reform plan that proposed deep tax cuts for businesses, but offered little detail about its implementation.
“The market is focused more on growth and earnings now than what is coming out of the administration,” said Ryan Caldwell, chief investment officer at Chiron Investment Management.
“It is good to see they are looking at taxes, and it’s good to know they are aggressive, but the implementation looks more like an end-of-the-year event.”
The S&P 500 technology index rose 0.5 per cent, led by PayPal, which hit an all-time high after raising its full-year earnings forecast.
Technology stocks will remain in focus ahead of results from sector heavyweights Microsoft and Alphabet, which are scheduled to report results after the bell on Thursday.
The Dow Jones Industrial Average was down 15.18 points, or 0.07 per cent, at 20,959.91, the S&P 500 was down 1.32 points, or 0.05 per cent, at 2,386.13 and the Nasdaq Composite was up 15.61 points, or 0.26 per cent, at 6,040.83.
Seven of the 11 major S&P 500 sectors were higher. Energy tumbled 1.5 per cent on the back of a more than 2-per-cent decline in oil prices. Financials, which had risen for the past three days, were down 0.7 per cent.
“I think in financials, it’s some profit-taking off a very good run week-to-date after the French elections,” Mr. Caldwell said.
Comcast was the top stock on the S&P, with a 3-per-cent increase after the company’s profit beat analysts’ estimates on strong subscriber growth.
American Airlines dropped 7 per cent after the company said it had deferred the delivery of several Boeing and Airbus jets, in the latest sign of oversupply in the market for long-distance airliners.
The news dragged down shares of other U.S. carriers, including Delta and United Continental.