TSX falls nearly 1 percent, weighed by drop in resource stocks

TORONTO (Reuters) - Canada’s main stock index fell almost 1 percent on Thursday as the country’s heavyweight energy and mining sectors lost ground amid a drop in commodity prices and as investors digested a string of corporate earnings.

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

Oil prices dove 5 percent to their lowest level since a November OPEC deal, on signs the group and other major producing countries will not take more drastic steps to reduce the world’s persistent glut of crude.

Canada’s energy group, which accounts for more than a fifth of the index’s weight, retreated 3 percent.

Colum McKinley, portfolio manager at CIBC Asset Management, said that with Canadian energy stocks already battered he would use days like today "as an opportunity to add to existing positions" in the likes of Canadian Natural Resources CNQ.TO, Suncor Energy Inc SU.TO and pipeline stocks Enbridge Inc ENB.TO and TransCanada Corp TRP.TO.

Canadian Natural, the country’s largest independent petroleum producer, fell 4.2 percent to C$41.43 after reporting a first-quarter profit, compared with a loss a year earlier.

TransCanada Corp TRP.TO fell 2.1 percent to C$62.65 after saying it would sell stakes in two pipelines, which McKinley said "provides investors with a better line of sight on how to think about the value of the company."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 146.44 points, or 0.94 percent, at 15,396.70.

Seven of its 10 main groups fell, with the materials sector, another major weight which includes precious and base metals miners and fertilizer companies, losing 1.9 percent.

Gold hit a six-week low and copper a five-month low a day after its biggest one-day drop in 20 months.

Teck Resources Ltd TECKb.TO lost 6.3 percent to C$24.95 after Deutsche Bank lowered its price target in the stock, while Hudbay Minerals HBM.TO fell 5.4 percent to C$7.41 after reporting an unexpected quarterly loss.

The financials group slipped 0.4 percent, with Canadian Imperial Bank of Commerce CM.TO down 1.6 percent to C$107.37 after raising its offer for PrivateBancorp PVTB.O.

Manulife Financial Corp MFC.TO rose 1.3 percent to C$24.44 after the life insurer beat earnings expectations with strong sales in Asia.

Home Capital Group Inc HCG.TO fell 12.1 percent to C$6.01 as a regulatory hearing to investigate claims the mortgage lender and three of its long-time executives had misled investors was adjourned until next month.

Empire Company Ltd EMPa.TO, parent of Sobeys grocery chain, gained 4.2 percent to C$21.29 after announcing a restructuring plan it says would deliver C$500 million of savings a year by 2020.

Reporting by Alastair Sharp; Editing by Bernadette Baum and Sandra Maler