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CANADA STOCKS-TSX hit as bank shares spooked by Home Capital woes

Published 2017-04-27, 04:58 p/m
© Reuters.  CANADA STOCKS-TSX hit as bank shares spooked by Home Capital woes
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* TSX down 143.07 points, or 0.91 percent, to 15,506.47

* Seven of the TSX's 10 main groups move lower

* Financials off 1.7 pct, energy group down 1.6 pct (Updates with closing share prices)

TORONTO, April 27 (Reuters) - Canada's benchmark stock index closed nearly 1 percent lower on Thursday, pulled lower by heavyweight banking stocks after an alternative lender's funding troubles raised concerns about the health of the housing market.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 143.07 points, or 0.91 percent, to end at 15,506.47. Seven of the index's 10 main industry groups were in the red.

Home Capital Group Inc HCG.TO , hit by a series of adverse news including a regulatory probe into its disclosures, said it had hired bankers to help it secure additional funding and size up its strategic options. a crisis affecting a company which happens to be operating in the mortgage market," said Fred Demers, chief macro strategist at TD Securities, who did not think there was a risk of contagion such as the one experienced during the 2008-09 financial crisis.

Home Capital shares popped 33.9 percent to C$8.02, offsetting some of Wednesday's 60-percent plunge, but the broader financial group - which accounts for a third of the index's weight - fell nearly 1.7 percent and had at one point touched four-month lows.

Seven of the index's 10 biggest drags were financial stocks. Royal Bank of Canada, the country's largest bank, RY.TO shed 1.9 percent to C$93.66, while Toronto-Dominion Bank TD.TO lost 2.4 percent to C$64.17 and Bank of Nova Scotia BNS.TO stumbled 2.7 percent to C$75.31.

Home Capital's funding woes come at a time when federal and provincial governments are trying to cool Toronto's red-hot property market through a series of measures. The runaway prices have attracted comments from banks CEOs that the market could correct, which in turn could hurt lender's earnings growth.

Canada's federal housing agency said on Wednesday that Toronto still faces price acceleration, overvaluation and overheating. energy group - which account for another 20 percent of the index's weight - retreated 1.5 percent as oil prices fell on news that two key oilfields in Libya had restarted, pumping crude for export into an already bloated market. O/R

Canadian Natural Resources Ltd CNQ.TO dropped 3.6 percent to C$43.43 and Encana Corp ECA.TO also fell 1.7 percent to C$14.48.

Canada's largest oil and gas company, Suncor Energy Inc SU.TO eked out a 0.3 percent gain to finish at C$41.75 after reporting better-than-expected profit. company Potash Corp of Saskatchewan POT.TO added 2.3 percent to finish at C$23.17 after beating profit expectations and upping its outlook. rival and planned merger partner Agrium AGU.TO advanced 2.3 percent to C$129.25.

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