Canadian stocks down despite favorable GDP data

Canada's main stock ended the week with a slight loss despite better than expected gross domestic product (GDP) figures.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index dropped 28.69 points, or 0.19 percent, to close at 14,725.86 points. Seven of the ten sub-sectors in the index were in the negative on the day.

Earlier in the day, Statistics Canada reported a 0.5 percent change in GDP for July, compared to the expected 0.3 percent growth. This marks the second consecutive month of growth, after June had a growth of 0.6 percent.

The largest gain was in the non-conventional oil extraction category, which rose 19 percent as the effects of the Fort McMurray wildfire in May have been erased.

Despite the positive trend, Brian DePratto, an economist with TD Bank, does not believe that the growth level can be sustained into the near future.

"The expected bounce-back in third quarter growth is largely a one-off story, helped along by both the post-wildfire recovery in oil and gas production and related activities," said DePratto in a report. "While the underlying details of today's report were encouraging, they are not consistent with a sustained 3 percent growth pace."

The TSX Materials group, which features miners of gold and other metals were hit the hardest on the day, falling 1.39 percent. Toronto-based gold miners IAMGold Corporation and Yamana Gold Inc. saw shares drop 4.16 and 3.42 percent, respectively to end the week at 4.04 U.S. dollars and 4.30 dollars.

Gold prices fell 0.54 percent on the day to 1,318.00 dollars an ounce. Meanwhile, silver prices inched up 0.31 percent to 19.24 dollars per ounce.

Telecommunications sector fell 0.31 percent on the day, as telecom giant Rogers Communication Inc. announced their intention to digitalize four of their major print magazines and limit the production cycle of three others. Stocks of B Class non-voting shares fell 0.70 percent to 42.41 dollars a share.

The Canadian dollar closed the week at 0.7619, compared to Thursday's closing rate of 0.7602 U.S. dollars.

Source:  XINHUA