Canadian stocks fell to a one-month low as energy shares plunged after election results in Alberta raised concern over the possibility of higher corporate taxes in the province.
The New Democratic Party, led by Rachel Notley, ended a 44-year Progressive Conservative dynasty by winning a majority of districts in elections Tuesday, according to Elections Alberta. The NDP promises to boost corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly.
The Standard & Poor’s/TSX Composite Index fell 150.05 points, or 1 percent, to 15,023.89 at 4 p.m. in Toronto, the lowest level since April 1. The loss trimmed the benchmark Canadian equity gauge’s advance in 2015 to 2.7 percent.
“It’s completely devastating” for energy companies and investors, Rafi Tahmazian, who helps manage C$1 billion ($831 million) in energy funds at Canoe Financial LP in Calgary, said on Tuesday. “The perception from the market based on their comments is they’re extremely dangerous.”
Materials companies in the index slid 1.3 percent, as seven of 10 industries in the S&P/TSX retreated.
Barrick Gold Corp. slumped 3.8 percent and Iamgold Corp. fell 6.9 percent as the price of the metal for the first time this week. Federal Reserve Chair Janet Yellen said bond yields could see a sharp jump after the central bank raises interest rates, crimping demand for gold as an alternative investment.
Enbridge Inc. lost 2.7 percent, the most in three months, after reporting results that missed analysts’ estimates. Canada’s largest pipeline company posted a first-quarter loss on adjustments to contracts meant to guard against swings in currencies, oil prices and interest rates.
Pacific Rubiales Energy Corp. rose 12 percent, to a Jan. 2 high. Alfa SAB, already the largest shareholder in Pacific Rubiales, joined Harbour Energy Ltd. in a takeover offer of about C$2.1 billion for the Colombian company to expand into the oil industry.