Canada’s main stock index dropped to a three-week low on Friday. A decline in metal prices negatively impacted the materials sector, causing the market to lose some of the substantial gains it had made since the U.S. presidential election.
The Toronto Stock Exchange’s S&P/TSX composite index closed down by 136.41 points, or 0.5%, at 25,274.30. This marks its lowest closing level since November 20.
For the week, the TSX experienced a 1.6% decline after achieving five consecutive weekly gains. Earlier this month, it reached a record high and has risen 4.6% since the start of November.
Sid Mokhtari, chief market technician for CIBC Capital Markets, stated that they have experienced a strong month following the U.S. presidential election. He noted that the recent mean reversion in broad indices is typical.
Mokhtari mentioned that Canada will likely remain range-bound for a while longer. He suggested this will last until the U.S. inauguration and until there is clarity on potential tariff threats from the U.S.
Donald Trump’s inauguration as U.S. president will occur on January 20. He has pledged to implement a 25% tariff on imports from Canada and Mexico as one of his first executive actions.
Finance Minister Chrystia Freeland stated that Canada will respond strongly if the United States applies unjustified tariffs on Canadian exports.
The materials sector, which encompasses fertilizer companies and metal mining shares, dropped by 1.7%. This decline extends the losses from the day before, driven by falling gold and copper prices.
Energy dropped by 0.5%, while industrials decreased by 0.7%.
Enghouse Systems Ltd (ENGH.TO) saw its shares plummet by 12.9% after the software solutions company fell short of revenue expectations for the fourth quarter.
Nine out of the ten major sectors experienced declines. The only exception was the technology sector, which benefited from a 9.1% increase in shares of electronics firm Celestica Inc (CLS.TO).
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