The Canadian stock market reacted sharply Wednesday as fears on Europe’s expanding debt crisis hurt miners and banking shares offset gains in the heavily weighted energy sector.
The S&P/TSX Composite Index plunged 54.91 points, or 0.45 percent, to 12174.36. The S&P/TSX Venture Composite Index lost 14.27 points, or 0.87 percent, to close at 1633.22.
Stocks opened lower Wednesday as more political developments in the eurozone kept investors on their toes. As the oil price for December delivery reached 99.11 U.S. dollars a barrel for the first time in four months, edging close to 100 dollars a barrel, energy stocks underwent a volatile session to close lower at the end of the day.
The TSX energy sector gained 0.83 percent as the December crude contract on the New York Mercantile Exchange jumped 2.23 dollars to reach 101.60 dollars a barrel. The gain came amid signs of lower U.S. inventories and improving economic data, such as Tuesday’s release of a better-than-expected retail sales report for October. Suncor Energy stocks rose 52 cents to 32.78 dollars.
The yield of Italy’s benchmark 10-year bond jumped back above the seven percent mark again on Wednesday. This has again switched the markets’ attention to the eurozone’s third largest economy as Mario Monti said he has succeeded in forming a new government and aims to restart economic growth.
The metals and mining sector suffered the biggest losses Wednesday. It lost 2.97 percent as commodity prices were lower, even though there was a short spike midday, reflecting worries about lower demand if Europe slides back into recession. Barrick Gold Corp., the world’s largest gold producer, lost 46 cents a share to close at 52.96 dollars.
The December copper contract on the New York Mercantile Exchange lost 3.5 cents to 3.49 dollars a pound. First Quantum Minerals dropped 2.41 percent to 18.59 dollars.
Signs of lower U.S. inventories and improving U.S. economic data did not give much relief to the market as eight of the TSX’s 10 main sectors performed less well. However, big mining losses were offset by momentum in the energy sector.
Also, shares of BlackBerry maker Research In Motion climbed 0.77 percent to 19.69 dollars after Goldman Sachs raised its rating.
Meanwhile, China’s Shandong Gold Group has made a billion-dollar offer to acquire Jaguar Mining, making the company’s shares almost double in value in the TSX.