Toronto stock index drops sharply, U.S. benchmarks make small gains | iNFOnews | Thompson-Okanagan's News Source

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Toronto stock index drops sharply, U.S. benchmarks make small gains

April 27, 2017 - 1:43 PM

TORONTO - Slumping oil prices and an ongoing scandal involving a Canadian mortgage lender dragged down the Toronto Stock Exchange's main index, which shed nearly 150 points.

The S&P/TSX composite index fell 143.07 points to 15,506.47 — for a two-day loss of 238.72 points.

"The principal issue that's overhanging the market is the Home Capital Group," said Tim Morton, senior vice-president and portfolio manager at TD Wealth.

Staff at Ontario's securities regulator recently alleged that Home Capital (TSX:HCG), two former chief executives and the current chief financial officer broke the law in their handling of a scandal involving falsified loan applications.

The company warned Wednesday that it would miss financial targets and was seeking a credit line, which it secured Thursday to the tune of $2 billion, to offset withdrawals from savings accounts at its subsidiary, Home Trust.

The lender's shares plummeted nearly 65 per cent or $11.10 Wednesday. They regained some of their value Thursday, rising 33.89 per cent or $2.03 — still a long way from recouping the previous day's loss.

The spillover, said Morton, is that it effected the valuations of Canadian bank stocks on Thursday.

Shares in the financials sector shed an average 1.65 per cent of their worth, but Morton doesn't expect the losses to stick.

"I think for the major banks this is more noise than anything else," he said.

The other main drag on the index came from falling oil prices.

The June crude oil contract fell 65 cents to US$48.97 per barrel and energy stocks declined an average of 1.49 per cent.

South of the border, where Morton said the markets are more heavily weighted in well-performing technology and consumer products, indices made small gains.

The Dow Jones industrial average gained 6.24 points to 20,981.33, the S&P 500 index inched forward 1.32 points to 2,388.77, and the Nasdaq composite index rose 23.71 points to a record-high 6,048.94.

The Canadian dollar slipped 0.06 of a U.S. cent to 73.40 cents US.

Elsewhere in commodities, the June gold contract rose $1.70 to US$1,265.90 an ounce, the June natural gas contract fell about three cents to roughly US$3.24 per mmBTU and the more heavily-traded July copper contract declined three-quarters of a cent to US$2.59 a pound.

Follow @AleksSagan on Twitter.

News from © The Canadian Press, 2017
The Canadian Press

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