The Canadian stock index S&P/TSX ended with a three digit loss for a second straight session, as shares from energy, materials and consumer discretionary sections tumbled amid persisting worries over trade related tensions.
The mood on Bay Street, where trading resumed after an extended weekend due to a holiday on Monday for Labor Day, was cautious right through the session after U.S. and Canadian officials failed to reach an agreement on trade last week. Key officials of the two countries are expected to resume talks this week. Recent reports have suggested that U.S. President Trump plans to move ahead with tariffs on $200 billion worth of Chinese imports as early as this week.
Trump threatened on Saturday that U.S. would go it alone with Mexico on a revised agreement or to terminate NAFTA entirely. "There is no political necessity to keep Canada in the new NAFTA deal," he is reported to have tweeted, "If we don't make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere with these negotiations or I will simply terminate NAFTA entirely & we will be far better off," he added.
Weakness in European markets and lower bullion prices weighed on sentiment. Although crude oil futures rose past $71 a barrel mark, energy stocks were under pressure. Crude futures retreated later and settled just marginally up for the day.
Shares from the healthcare space had a good outing, while information technology and financials stocks ended mixed. Telecom and industrials stocks were weak.
The benchmark S&P/TSX Composite Index ended lower by 101.58 points or 0.62%, at 16,161.30, after scaling a high of 16,276.26 and a low of 16,152.17 intraday. On Friday, the index closed down by 108.67 points or 0.66%, at 16,262.88.
The Capped Energy Index declined by 1.63%. Suncor Energy Inc. (SU.TO), Canadian Natural Resources (CNQ.TO), Cenovus Energy Inc. (CVE.TO), Vermilion Energy Inc. (VET.TO) and PrairieSky Royalty (PSK.TO) lost 1.3 to 2.1%, while Tourmaline Oil Corp. (TOU.TO) and ARC Resources (ARX.TO) ended lower by 3.6% and 3.8%, respectively.
The Capped Materials Index eased by about 2%. First Quantum Minerals (FM.TO) tanked by about 6.6%, Goldcorp Inc. (G.TO) ended 4.5% down, Wheaton Precious Metals Corp. (WPM.TO) ended 3.4% down, Barrick Gold Corporation (ABX.TO) declined by 3% and Agnico Eagle Mines (AEM.TO) ended 2.7% down.
Franco-Nevada Corporation (FNV.TO) declined by about 1.7%, while CCL Industries Inc. (CCL.B.TO) bucked the trend and advanced by 2.2%.
The Capped Consumer Discretionary Index shed about 1.4%. The Stars Group Inc. (TSGI.TO), which declined as much as 8.2% and Shaw Communications Inc. (SJR.B.TO), which ended lower by 3.1%, were the prominent losers in the index.
The Capped Consumer Staples Index ended 1.3% down. Loblaw Companies (L.TO), Metro Inc. (MRU.TO), Saputo Inc. (SAP.TO), George Weston (WN.TO) and Empire Company (EMP.A.TO) lost 1.3 to 3%.
Premium Brands Holdings Corporation (PBH.TO) ended lower by about 1.5%. The company announced that it has signed a definitive agreement to purchase Ready Seafood Co.
The heavyweight Financial Index eased by about 0.21%. Bank of Nova Scotia (BNS.TO) declined by 0.45% and National Bank of Canada (NA.TO) lost about 1%,
Bank of Montreal (BMO.TO) edged up by about 0.35%, while Canadian Imperial Bank of Commerce (CM.TO), Royal Bank of Canada (RY.TO) and Toronto-Dominion Bank (TD.TO) ended flat.
Laurentian Bank Financial Group (LB.TO) reported a 1% drop in adjusted net income, year-over-year. The stock declined by about 6.2%.
The Capped Healthcare Index gained 5.15%. Canopy Growth shares vaulted 15.4% after Cowen and Company raised the price target for the stock to $74.00 from $56.00. Aphria Inc. (APH.TO) climbed more than 9% after the company announced that it has entered into a strategic partnership with Schroll Medical to pursue the cultivation and worldwide distribution of organic,
AGT Food and Ingredients Inc. (AGT.TO) announced that it has entered into a minority investment to acquire and operate the Hudson Bay Railway, Churchill Marine Tank Farm and Port of Churchill facilities from Omnitrax Inc. The stock declined marginally.
MTY Food Group Inc. (MTY.TO) announced that one of its wholly-owned subsidiaries has signed an agreement to acquire most of the assets of the sweetFrog Premium Frozen Yogurt franchise system for an estimated consideration of USD $35 million. The stock ended 0.5% up.
The U.S. market ended lower, but well off the day's lows. Asian markets ended mixed on Tuesday. European markets declined amid rising trade tensions and the sell-off in emerging market currencies, particularly in Argentina and Turkey.
In economic news from U.S., a report from the Institute for Supply Management showed activity in the U.S. manufacturing sector to have unexpectedly grown at a faster rate in the month of August. The ISM said its purchasing managers index climbed to 61.3 in August from 58.1 in July. Economists had expected the index to dip to 57.7.
Meanwhile, a separate report released by the Commerce Department showed a modest uptick in construction spending in the U.S. in the month of July.
In economic news from Eurozone, data from Eurostat showed Eurozone producer price inflation accelerated on energy prices in July, advancing 4% year-on-year in the month, following a 3.6% rise in June. Prices were expected to gain 3.9% in July.
UK construction activity expanded at the weakest pace in three months in August largely mirroring lack of new work on infrastructure projects, survey data from IHS Markit showed Tuesday.
UK like-for-like sales increased slightly in August, figures from the British Retail Consortium and KPMG showed Tuesday. Like-for-like sales rose slightly by 0.2% year-on-year in August. At the same time, total sales advanced 1.3% annually.
In commodities, crude oil futures for October delivery ended up 0.1%, at $69.87 a barrel, after rising to a high of $71.40 intraday.
Natural gas futures for October were down $0.102, or 3.5%, at $2.814 per million btu.
Gold futures for December ended down $7.60, or 0.6%, at $1,199.10 an ounce.
Silver futures for December settled at $14.180 an ounce, down $0.377 from previous close.
Copper futures ended down $0.0690, at $2.6020 per pound.
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