TSX falls as grocers, consumer stocks battered by Amazon news

Stockhouse @ the Bell: TSX climbs off 6-month low

Experts say Amazon's US$13.7 billion acquisition of Whole Foods poses a threat to Canada's grocers and could shake up the supermarket industry.

At the close, shares of Loblaw (TSX:L) tumbled $2.70 or 3.58 per cent to $72.79, while Metro (TSX:MRU) shed $1.29 or 2.9 per cent to $43.16.

Empire Company Ltd, which has about 1,500 Canadian stores operating under banners including Sobeys and FreshCo, fell 3.3 percent to C$18.80.

The Toronto Stock Exchange's S&P/TSX composite index pulled back 9.71 points to 15,160.42, with metals, energy and materials stocks bearing the biggest losses.

But losses for the TSX were narrowly based, with seven of the index's 10 main groups ending higher.

Amazon buys Whole Foods for $14 million
The takeover is slated to be completed in the second half of the year, with Whole Foods' headquarters remaining in Austin, Texas. Both companies said there will be no layoffs, but they did not respond to other questions about Amazon's plans for Whole Foods .

Consumer discretionary shares also retreated sharply, declining 1.2 percent, with Magna International Inc taking a 3.8 percent hit to trade at C$57.73.

Dollarama Inc slid 1.5 percent to C$121.45, while Canadian Tire Corp fell 1.7 percent to C$146.90.

Recent weakening in oil and gold prices has weighed on the index, which is very "resource-orientated" and could fall another 4 percent before finding a floor, Mokhtari said. Several analysts cut its target price on the news.

The central bank raised interest rates for the second time this year and forecast one more rise in 2017.

Stock futures pointed to a lower opening for Canada's main stock index on Thursday as oil prices continued to fall and investors remained concerned about USA economic growth despite a widely expected interest rate hike by the Federal Reserve. Brookfield Asset Management fell 1.2 percent to C$50.05 and was among the most influential decliners.

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