Canada’s main stock index touched a more than three-month low on Monday, pulled down by Shaw Communications and resource-linked stocks as commodities retreated on worries over a slowdown in global economic growth.
At 9:47 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 397.9 points, or 1.93%, at 20,235.38, hitting its lowest level since Jan. 25 with all sub-sectors in red.
Shaw Communications Inc plunged 8.7% to the bottom of the index after Canada’s Commissioner of Competition said it intends to oppose Rogers Communications Inc’s proposed C$20 bln ($16 billion) merger with the company.
The energy sector dropped 3.8%, as oil prices fell, weighed down by a strong dollar and demand concerns on the back of extended coronavirus lockdowns in China, the world’s top oil importer.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2.6% as gold prices retreated 1% as a firmer dollar and elevated U.S. Treasury yields weighed on the appeal of non-yielding bullion.
“The rally in commodity prices on Friday helped to cushion the blow in Canada relative to the U.S., (on Monday) we see a reversal to that with stocks under pressure and with commodities under pressure,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Toronto-listed technology stocks, down 2.9 %, fell for the third straight session, tracking weakness in the U.S. tech-heavy Nasdaq index.
The financials sector slipped 1%, while the industrials sector fell 1.3%.
Concerns around a slowdown in global growth amid lockdowns in China and prospects of aggressive policy tightening by major central banks pressured global investor sentiment.
Investors waited for earnings from major Canadian companies including Suncor Energy, Manulife Financial, Canadian Tire and Canada Goose due later in the week.
“Unless there is some huge surprise from a specific company, for most part macro forces will be driving the markets,” Cieszynski added.
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