Canadian stock retreats to 31-month low

Toronto, Jan 21 (IANS) Canada’s main stock market in Toronto dipped to 31-month low amid falling international oil prices and a decision by its central bank to keep the key interest rate unchanged.

The Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite Index lost 159.13 points, or 1.33 percent, to close at 11,843.11 points on Wednesday, Xinhua news agency reported.

It is the index’s lowest levels since June 2013.

Seven of the TSX index’s eight main sectors lost ground, with financial stocks leading the decline with a 1.78 percent loss, responding negatively to Bank of Canada’s announcement to maintain the benchmark rate at current levels of 0.5 percent.

The TSX energy group took another nosedive Wednesday after US oil price plummeted below $27 a barrel as the market continued to be bewildered by a supple glut amid fears about the pace of global growth. The overall energy sector went down 1.30 percent.

The central bank cut its rate twice in 2015 in an attempt to stimulate the economy but did not seem to work well.

The Canadian dollar jumped about half a cent on the rate news, a sign that investors were worried about a rate cut, and priced it into the value of the currency.

By closing, the Canadian dollar was traded mildly higher at $0.6901, compared with Tuesday’s closing rate of $0.6869.

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