TSX falls on yuan weakness, global demand worries

“I’d say the fundamentals in Canada relative to U.S. suggests the Canadian dollar should stay at current levels or lower”, he said.

The Standard & Poor’s/TSX Composite Index fell 75.14 points, or 0.5 per cent, to 14,339.53, paring an earlier decline of as much as 1.6 per cent. The benchmark Canadian equity gauge has fallen 2 per cent this year, making one of the worst-performing developed-nation markets.

The People’s Bank of China devalued the yuan by almost 2 percent overnight in China’s latest attempt to bolster its economy following a string of poor economic data. The S&P 500 lost one per cent to lead U.S. equities lower while the Stoxx Europe 600 Index sank 2.6 per cent, the biggest decline since June 29.

The 12-country cartel has been trying to curtail output in recent months, but new questions about the health of China’s economy has added pressure to prices and the outlook for future demand.

Commodities provided a haven for investors Wednesday, as Yamana Gold Inc. increased 9.1 per cent and Barrick Gold Corp. rallied 4.9 per cent as investors traded into the safety of gold. Its stock rose nine cents to $15.09.

Air Canada tumbled 3.8 per cent after second-quarter revenue fell short of analysts’ estimates.

Energy moved lower 0.81 percent over the falling oil prices as the oil supply of the Organization of Petroleum Exporting Countries hit a three-year high in July, reaching 31.51 million barrels a day, according to a report of the bloc released Tuesday.

The stronger dollar hit commodity prices, driving Brent crude LCOc1 and U.S. crude CLc1 down over 1 percent, while prices of commodities such as copper, aluminum, nickel and zinc slid between 1 and 2.5 percent. Shares of Google rose $27.05 or 4.27 per cent to US$660.78.