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Roundup: Canadian stock market dips over gold slump, IMF's oil concern

Xinhua, February 7, 2015 Adjust font size:

Canada's main stock market in Toronto closed lower Friday as the gold shares tumbled and the International Monetary Fund (IMF) sees uncertainty about oil prices.

Toronto Stock Exchange's benchmark S&P/TSX Composite Index was down 41 points, or 0.27 percent, to 15,083.92 points, but the index logged an increase of 2.5 percent this week on the closing bell.

Although Statistics Canada reported bettered-than-expected labor market data showing that the national unemployment rate declined 0.1 percentage point to 6.6 percent, the TSX still closed negative as the gold shares plunges over the gold price slide.

The metals and mining sector declined 1.27 percent. And S&P/TSX Global Gold Index shrank 4.89 percent to 182.34 points, when gold futures on the COMEX division of the New York Mercantile Exchange fell sharply on Friday with the most active gold contract for April delivery falling 28.1 U.S. dollars, or 2.23 percent, to settle at 1,234.60 dollars per ounce.

Many Canadian gold stocks dived when Goldcorp Inc. vapored 6.01 percent to 28.64 Canadian dollars (about 22.87 U.S. dollars) and the world's biggest gold producer Barrick tumbled 4.93 percent to 15.44 Canadian dollars.

Meanwhile, investors were still concerned about the turbulence of the crude market, as the International Monetary Fund (IMF) sees uncertainty about path of oil prices in a latest report Friday, although the energy sector added 0.72 percent with its heavyweight Suncor Energy Inc. up 0.49 percent to 38.74 Canadian dollars.

And IMF warned that oil-exporting countries may suffer capital outflows and volatility due to the falling oil price.

"Falling oil prices clearly hit both Canadian revenue and investment in the oil sector thereby weakening Canadian short term economic prospects," according to Thomas Bernes, a fellow with the Center for International Governance Innovation (CIGI), a Canadian- based think-tank.

The index's most heavily weighted sector Financials advanced 1. 03 percent, when Royal Bank of Canada advanced 0.90 percent to 76. 07 Canadian dollars.

In other losers, Utilities dropped 1.77 percent, as Fortis Inc. gave back 2.06 percent to 40 Canadian dollars. And Telecom fell 1. 72 percent with Telus down 1.30 percent to 43.16 Canadian dollars per share.

On the currency front, the Canadian dollar on Friday moved down to settle at 0.7985 U.S. dollar from 0.8049 U.S. dollar on Thursday.

Thomas Bernes told Xinhua that "allowing the exchange rate to move flexibly does not so much shelter the oil industry from declining oil prices. Rather it provides an opportunity for other sectors of the economy to grow more strongly." Endite