TSX starts March on a down note as energy sector hit by Enbridge pipeline delay

Toronto's financial district is pictured December 30, 2011. THE CANADIAN PRESS/Frank Gunn

Republished March 04, 2019 - 2:11 PM

Original Publication Date March 04, 2019 - 8:31 AM

TORONTO - Canada's main stock index started the month by losing some ground after a sizzling start to the year.

"Even with today's decline...we're still up 11, 11.5 per cent on Toronto and New York, just in the first two months of the year, so I think the markets have been a little bit oversold," said Michael Currie, vice-president and investment adviser at TD Wealth.

The Toronto market's fall was led by weakness in the energy sector, which lost 1.7 per cent after Enbridge said it was delaying its Line 3 pipeline startup. Oil heavyweights Enbridge Inc., Cenovus Energy Inc. and Canadian Natural Resources fell by 4.5 to 5.8 per cent.

The decreases came despite a rise in crude oil prices on production curtailments by OPEC and Russia. The April crude contract was up 79 cents at US$56.59 per barrel and the April natural gas contract was down 0.2 of a cent at US$2.86 per mmBTU.

Overall, the S&P/TSX composite index closed down 30.12 points to 16,038.13, after hitting an intraday low of 15,954.96.

The energy decline was partially offset by gains by the materials and industrials sectors. Railroads Canadian National and Canadian Pacific saw stock increases on the prospect of more crude by rail.

"So unfortunately energy's pain is the railroads's gain," Currie said in an interview.

Gold prices fell for a sixth straight day with the April gold contract down US$11.70 at US$1,287.50 an ounce and the May copper contract was down 2.3 cents at US$2.91 a pound.

Despite the price drops, stocks of gold miners Goldcorp Inc. and Barrick Gold Corp. gained more than three per cent after Newmont Mining Corp. rejected a hostile takeover offer from Barrick Gold and countered with a proposal of its own.

In New York, the Dow Jones industrial average was down 206.67 points at 25,819.65. The S&P 500 index was down 10.88 points at 2,792.81, while the Nasdaq composite was down 17.79 points at 7,577.57.

The Canadian dollar traded at an average of 75.09 cents US compared with an average of 75.41 cents US on Friday.

While March has historically been a positive month for markets, there could be a correction after being overbought in January and February, said Currie.

"We're certainly not looking for a dramatic decline, but the standard two to three per cent pullback from here I don't think in the next quarter would be surprise," he said.

"I'd probably preach patience and just enjoy the gains we've had so far."

Companies, index and currency in this story: (TSX:ENB, TSX:CVE, TSX:CNQ, TSX:G, TSX:ABX, TSX:CNR, TSX:CP, TSX:GSPTSE, TSX:CADUSD=X)