09/19/2014 08:38 EDT | Updated 06/16/2017 01:00 EDT

TSX falls more than 200 points, pulled down by metals, gold, materials

TORONTO - The Toronto stock market pulled back sharply in heavy trading Friday, weighed down by metals and mining, gold and financials stocks.

The S&P/TSX composite index dropped 200.19 points to close at 15,265.35 on volume of 694 million shares. The Canadian dollar was unchanged 91.35 cents US.

Metals and mining was the leading sector decliner on the Toronto market, down 4.03 per cent even as December copper was flat at US$3.09 a pound.

The gold sector followed, down 2.39 per cent as December bullion lost $10.30 to US$1,216.60 an ounce. Meanwhile, the November crude contract on the New York Mercantile Exchange fell 33 cents to US$91.65 a barrel and the energy sector faded 1.87 per cent.

The big decline in the Toronto exchange came despite optimism in most global markets following Scotland's decision to remain part of the United Kingdom. Fifty-five per cent of Scots voted against independence in the referendum Thursday, compared with 45 per cent in favour of separation.

The news came as a relief to investors because it avoids uncertainty in the U.K. economy and markets over the future value of the pound and public debt, among other issues.

"It certainly was believed by markets that this was the most profitable outcome," said Kash Pashootan, vice-president and portfolio manager at First Avenue Advisory in Ottawa, a Raymond James Company.

"What would've been catastrophic was if the vote was not what it was. In that case, you would've seen markets sell off considerably due to the unknown factor of how things would look moving forward."

Markets now can generally move on from the economic risks associated with Scotland, he said.

"The Scotland story is going to pass. It's not going to be a topic of interest in the short term, with the vote clearly stating that they're going to remain," said Pashootan.

Meanwhile, U.S. markets were mixed amid the stability from the vote and the blockbuster IPO debut of Chinese e-commerce company Alibaba.

The Dow Jones industrials advanced 13.75 points to 17,279.74, another record high. The Nasdaq dipped 13.64 points at 4,579.79 and the S&P 500 index was relatively flat, losing 0.96 of a point to 2,010.40.

Alibaba's stock rose 38 per cent above its IPO price to close at US$93.89 on the New York Stock Exchange and has surpassed the market value of tech giants such as Amazon, Cisco and eBay. It had debuted at US$68 a share.

In other corporate news, TransCanada Corp. says costs for its long-delayed Keystone XL pipeline will likely balloon to as much as US$10 billion, up from US$5.4 billion.

CEO Russ Girling told the Wall Street Journal that the price tag could rise to a "number that gets you into the high single digits to a 10 number" as the project remains in limbo. Company spokesman Shawn Howard has confirmed those remarks, adding the higher costs will be passed on to refiners and consumers in the end.

Keystone XL would link 830,000 barrels per day of mostly oilsands crude to an existing network that feeds into the lucrative U.S. Gulf Coast refining market.

Environmental concerns over the project range from a potential spill's impact on drinking water to the enabling of further oilsands development and its accompanying increase in greenhouse gas emissions. Backers of the project say it would create construction jobs and displace crude imports to the U.S. from unfriendly regimes. Shares in TransCanada (TSX:TRP) gained nearly one per cent, or 57 cents, to $61.38 on the Toronto Stock Exchange.

In economic news, Statistics Canada says the country's annual inflation rate was 2.1 per cent in August, unchanged from the previous month. However, core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, also rose by 2.1 per cent, after an increase of 1.7 per cent in July.

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