TORONTO (Reuters) – The Toronto Stock Exchange’s main index slid more than 100 points on Monday, pulled down by resource shares, which fell in tandem with commodity prices. .
Drug maker Cardiome Pharma was among the biggest drags on the index, losing 17.7 percent after the company said U.S. regulators had requested more information on its Kynapid treatment for a potentially fatal heart condition.
Shares of gold producers tumbled as they were rattled by a sharp drop in bullion prices as the U.S. dollar gained. Gold slumped to below $820 an ounce and shares of Barrick Gold , the world’s biggest producer, were down 6.4 percent.
“(Resource issues) definitely look like they’re oversold, but I would say the market sentiment is still very negative, so I think they still have room to go down,” Laura Lau, senior portfolio manager at Sentry Select Capital Corp.
The S&P/TSX composite index closed down 138.55 points, or 1.04 percent, at 13,203.19 with seven of its 10 main sectors in negative territory.
The small health sector led the way down, shedding 6.3 percent as Cardiome dropped C$2.28 to C$10.57. Cardiome and its Japanese co-development partner, Astellas Pharma Inc , said the U.S. Food and Drug Administration had completed its review of their application for approval of the Kynapid treatment but requires more information before making a decision.
The materials group, home to mining companies, fell 4.7 percent as prices for gold and other metals weakened. Barrick was down C$2.40 at C$35.00, while Teck Cominco lost C$1.92, or 4.7 percent, to C$39.32.
Fertilizer shares also lagged, with Agrium falling C$3.96, or 4.7 percent, to C$79.94, and Potash Corp of Saskatchewan giving up C$11.44, or 6.3 percent, to C$171.55.
Worries over sagging demand for resources have helped take the TSX’s heavyweight energy and materials sectors lower in recent weeks.
“Commodities are a lot more to do with global growth, and I think the worry is that the global economy is actually slowing down, and people are fearful that China will definitely slow down after the Olympics,” said Paul Harris, portfolio manager at Avenue Investment Management.
However, analysts said that the long-term view for resource stocks was still favorable, with Lau expecting a pick-up in shares in the fourth quarter.
On the earnings front, shares of Manitoba Telecom Services slipped after the company reported a lower quarterly profit even as it cut costs and had growth in some of its services. MTS closed down 57 Canadian cents, or 1.4 percent, at C$40.69.
Market volume was 405 million shares worth C$6.5 billion. Decliners outpaced advancers 969 to 578. The blue chip S&P/TSX 60 index closed down 7.70 points, or 0.97 percent, at 790.16.
In New York, stocks benefited as crude slid below $115 a barrel, which boosted optimism over the outlook for consumer and corporate spending.
The Dow Jones industrial average closed up 48.03 points, or 0.41 percent, at 11,782.35, while the Nasdaq composite index rose 25.85 points, or 1.07 percent, to 2,439.35.
Written by: Leah Schnurr