Roundup: Canadian stock market retreats on central bank's warning

Canada's main stock market in Toronto turned lower on Thuesday, as Canada's central bank warned of the rising risk to financial stability due to lower oil prices.

Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index edged down 58.16 points or 0.39 percent to 14,830. 88 points, with six of the eight major sectors in the negative territory.

In its newly released report Financial System Review, Bank of Canada said that oil slump has increased risks to financial stability by holding back on income increases and economic growth, and impacting the housing markets of oil-producing regions.

"The vulnerability associated with household indebtedness remains important and is edging higher," the central bank said, while noting the probability of a severe recession remains low.

The review spread jitters across the market, pushing down energy as well as metals and mining shares, which lost 1.08 percent and 2.66 percent, respectively.

Suncor Energy Inc., Canada's biggest oil and gas producer, plunged 1.96 percent to 35.52 Canadian dollars (about 28.94 U.S. dollars) and another giant Cenovus Energy Inc. also tumbled 1.65 percent to 20.22 Canadian dollars per share.

In metals and mining sector, the biggest loser in TSX, two leading companies First Quantum Minerals Ltd. dived 3.5 percent to 17.08 Canadian dollars and Lundin Mining Corp. shrank 3.64 percent to 5.56 Canadian dollars.

Telecom lost 1.02 percent and financials, the most weighed sector, moved down 0.21 percent.

However, Health care and info tech eked out gains of 0.48 percent and 0.04 percent, respectively.

Meanwhile, the central bank's report pointed out that the decline in oil prices alone is unlikely to trigger a material risk to the system as a whole.

"The implications of today's FSR are nil for our view that the Bank of Canada will keep rates on hold until the end of 2016," Randall Bartlett, a senior economist from TD Bank, said in a report on Thursday.

The central bank also expected that the imbalances in the household sector and housing market will ease as the economy improves.

On the housing data, Statistics Canada reported Thursday that its new housing price index rose 0.1 percent in April, following zero-change in March.

On the currency front, the Canadian dollar traded lower at 0. 8147 U.S. dollar on Thursday from 0.8155 U.S. dollar on Wednesday. Endite