By Ragini Mathur (Reuters) -Canada’s commodity-heavy main stock index retreated on Monday as declining gold prices outweighed optimism from progress in U.S.-China trade negotiations. At 10:15 a.m. ET (1415 GMT), Toronto’s S&P/TSX composite index was down 0.5% at 30,214.64 points. Materials stocks emerged as the primary laggard, falling 3.4%. Gold prices tumbled 2% as investors […]
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TSX falls as gold selloff outweighs trade deal hopes
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By Ragini Mathur
(Reuters) -Canada’s commodity-heavy main stock index retreated on Monday as declining gold prices outweighed optimism from progress in U.S.-China trade negotiations.
At 10:15 a.m. ET (1415 GMT), Toronto’s S&P/TSX composite index was down 0.5% at 30,214.64 points.
Materials stocks emerged as the primary laggard, falling 3.4%. Gold prices tumbled 2% as investors shifted toward riskier equities due to easing trade tensions between the world’s two largest economies. [GOL/]
“A lot of the move…in the TSX over the past ten months has been because of materials and gold,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth, adding that today’s gold drop is pressuring the index since gold-heavy materials make up nearly a fifth of the benchmark.
Top Chinese and U.S. economic officials sketched out on Sunday a trade deal framework, which could likely pause steeper American tariffs and Chinese rare earths export restrictions, offering a welcome relief to investors.
Information technology shares led gainers on the TSX, with electronic equipment manufacturer Celestica surging nearly 5% ahead of its quarterly earnings report scheduled for release after market close.
Energy stocks also brightened the session with a 0.3% advance as oil prices recovered from early losses.[O/R]
Meanwhile, rate-sensitive utilities weakened 0.4% as Canadian government 10-year bond yields rose 0.2 basis points to 3.089%, in line with U.S. 10-year Treasuries.
On the trade front, U.S. President Trump announced on Saturday an additional 10% tariff on Canadian imports. Canadian Prime Minister Mark Carney is scheduled to meet Chinese President Xi Jinping later this week and has expressed willingness to engage in trade talks with Trump.
Investors will also focus on central bank policy decisions this week, with both the Bank of Canada and the U.S. Federal Reserve widely expected to implement a quarter-point interest rate cut.
“There’s no doubt that they have to cut… especially if the Federal Reserve cuts, we must follow. They’re our competitors right now, they’re not our allies,” Small said.
(Reporting by Ragini Mathur in Bengaluru; Editing by Vijay Kishore)