Oil price drop halts rally in Toronto bourse

June 4th, 2009 - 12:06 pm ICT by IANS  

Toronto, June 4 (IANS) As oil prices retreated after a week-long rise when it almost touched $70 a barrel, the world’s biggest energy stock market here slipped nearly 300 points Wednesday.
The Toronto Stock Exchange (TSX), which has more than 400 major oil and gas companies trading on it, closed at 10,290.12 points.

The market rally was stopped as oil prices dropped to $66.12.

Since April, the Canadian market has regained almost 30 percent of the losses it suffered after the economic crisis began last year.

The Canadian currency - the loonie - was also down against the US dollar as the greenback strengthened against the euro and the pound.

The loonie almost reached 93 cents US Tuesday, deepening worries about its adverse impact on the country’s economic recovery.

The Canadian dollar is the world’s foremost commodity currency whose fortunes swing with the prices of the country’s top commodities - oil and minerals.

Having dropped to almost 76 cents US in March, the loonie has made major gains since then.

It rose almost seven percent during the month of May as oil prices started recovery.

The retreat in oil prices Wednesday took their toll on the energy sector on the Toronto stock exchange, with energy shares dropping five percent.

The metal sector, another pillar of the Canadian economy, also slipped 4.7 percent.

The financial sector too was down 2.3 percent.

Market analysts here welcomed the drop in the Canadian currency as its rapid rise heightened concerns about an early economic recovery.

Since Canada sends about 85 percent of its exports to the US, a rising loonie was making Canadian products expensive for the Americans already in deep recession.

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