TSX weekly winning streak comes to an end

The Toronto market lost 72.04 points in the week, its first weekly drop since the end of December.

The market pulled back after a very strong start to the year that saw it gain up to 12.7% from last autumn’s deep selloff, says Patrick Blais, senior portfolio manager at Manulife Asset Management.

“We’ve had such a strong run and any weakness in the data and anything that would undermine the confidence of the markets would cause sort of a quite abrupt pullback or some volatility and I think that’s what we saw today,’’ he said in an interview.

The market’s decrease was prompted by signals this week from central banks about slower global economy growth and Friday’s release of weak U.S. jobs numbers. Employers added just 20,000 jobs in February, well short of the 180,000 expected by economists and 311,000 in January.

Investors reacted to U.S. jobs numbers even though Canada saw the best two-month start to a year since 1981 with the creation of 55,900 positions and the unemployment rate holding firm at 5.8%.

“I think the read through today is more sort of all the weakness that we’ve seen globally is potentially having an impact on the U.S. labour market,’’ Blais said.

The result was a fall in the U.S. dollar to the benefit of the loonie.

The Canadian dollar traded at an average of US74.50¢ compared with an average of US74.42¢ on Thursday.

The fall in the TSX was driven by weakness in the energy sector, which fell by 2.2% as company shares were primarily affected by weaker oil prices and concerns about lower demand for oil and oversupply.

The April crude contract was down US59¢ US$56.07 per barrel and the April natural gas contract was down one tenth of a cent at US$2.86 per mmBTU.

Blais said he doesn’t believe Norway’s decision to dump shares in oil and gas companies, including some Canadian names, from its US$1-trillion wealth fund, had much impact on share prices since the move was telegraphed many months ago.

Still, several affected companies saw their share prices dip. Calgary-based oilsands producer Cenovus Energy Inc. fell by 3.2%, followed by Canadian Natural Resources Ltd. and Encana Corp.

Eight of the market’s 11 major sectors were down. Materials gained 1.3% as gold miners like Yamana Gold Inc. and Kinross Gold Corp. posted increases of 7.8% and 6.1% respectively.

The April gold contract was up US$13.20 at US$1,299.30 an ounce and the May copper contract was down US1.7¢ at US$2.89 a pound.

In New York, U.S. markets fell for a fifth-straight day. The Dow Jones industrial average was down 22.99 points at 25,450.24. The S&P 500 index was down 5.86 points at 2,743.07, while the Nasdaq composite was down 13.32 points at 7,408.14.

Blais said market weakness could continue unless there is positive economic data.

“It doesn’t mean it’s downhill. We’ll be dependent on economic data to see where the market goes.’’