Canada’s benchmark stock index had its worst day of the year as oil prices moved lower and financial firms sold off, despite record earnings at some of Canada’s biggest banks.
The S&P/TSX composite index was off by 247 points to 15,533, or 1.57 per cent, at the close of trading. In point terms, that’s the TSX’s biggest one-day loss since last September.
Oil prices lost about half a dollar to just over $54 US a barrel as oil services company Baker Hughes revealed in its weekly report that there were 602 working oil rigs across the U.S. last week. That’s almost twice as many as the low hit in 2015, but still barely a third of the number seen in late 2014, when oil prices were above $100 US a barrel.
More oil rigs means more oil production, which pushes down prices.
The prospect of cheaper crude was a drag on the TSX, as the index is full of energy names. All but one of the 50 energy-related companies on the main TSX index were lower on Friday, with the lone exception being Pembina Pipeline Corp. which gained one per cent after posting record earnings.
All in all, 218 companies on the main TSX index lost value on Friday. Only 30 gained.
The only sector on the TSX with a larger impact than energy is financials, and it too was lower, despite two of Canada’s biggest banks posting record profits in recent days. On Thursday, CIBC reported its profit was up by more than 40 per cent. And on Friday, Royal Bank reported $3 billion in profit — a 24 per cent increase.
But it’s not enough to satisfy investors, who appear to have concerns that a Trump-inspired stock rally may not last.
“The dizzying heights for equities are causing some vertigo, with a wide variety of commentators and analysts openly fretting that the market is overbaked,” BMO economist Doug Porter said.
The other three big Canadian banks are all due to post their earnings next week. Those should give another good picture of the economy’s recent performance, as “there…