TORONTO: Canada's main stock index fell on Wednesday but was on track to finish in positive territory for a third consecutive year despite blows dealt by oil, which is heading for its biggest annual decline since 2008.
The resource-heavy index, which is more than 1,000 points off record highs reached in September, was pulled down by energy stocks on Wednesday, as well as financial and materials shares, though U.S. equities edged higher in early trading.
Oil dropped as a survey showed China's factory sector shrank for the first time in seven months in December, a bearish indicator for an oil market already under pressure from weakening demand and a supply glut.
"It looks like a U.S. up day, Canadian down day, just because of oil," said Keith Richards, portfolio manager and technical analyst at ValueTrend Wealth Management.
The Toronto Stock Exchange's S&P/TSX composite index was down 61.5 points, or 0.42 percent, at 14,578.50.
Energy stocks fell 1.2 percent, led by heavyweight Suncor Energy Inc, which was down 1.6 percent at C$36.51.
Richards sees the oil downturn as cyclical, and expects further declines in the medium term, as well as lower copper prices.
"We could se a bounce on oil, it could go from the fifties back to $60 or something in the short term, but generally speaking I think oil is heading down to the forties again," he said. "I can't be bullish on commodities."
Copper fell on Wednesday, and ended the year down 14 percent, its biggest annual decline in three years, on fears that a supply surplus would hit the market next year.
Spot gold also fell, and materials sector dropped 1.2 percent. Barrick Gold Corp was a drag on the index, falling 2.5 percent to C$12.29.
The index was on track to finish up about 7 percent from the end of 2013, when it rose nearly 10 percent.
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