TSX posts biggest weekly drop since January on Omicron uncertainty

TORONTO: Canada’s main stock index fell on Friday as concern that the Omicron coronavirus variant will clip global economic activity eclipsed encouraging domestic jobs data, with the index adding to this week’s decline.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 128.76 points, or 0.6%, at 20,633.27. For the week, the index was down 2.3%, its third straight decline and its biggest since January.

“Economic activity is going to fall from here,” said Barry Schwartz, portfolio manager at Baskin Financial Services. “This new variant has got everybody scared.”

“No one wants to be brave and take a stance until it’s clear what the next steps are going to be.”

Canada’s economy posted an unexpectedly large job gain in November, driving the jobless rate down and hours worked up to pre-pandemic levels, but economists say it is unlikely to change the Bank of Canada’s guidance amid worries over the new variant.

The technology sector was among the biggest decliners, falling 2.5%, while healthcare was down 2.6% as shares of pot producers lost ground.

Bank of Montreal added 2.4% as its quarterly earnings topped market expectations and the lender joined rivals in raising its dividend and announcing a share buyback program. Still, financials lost 0.3% as did the energy sector, with oil giving back its earlier gains to settle 0.4% lower on growing worries that rising coronavirus cases and the new variant could reduce global oil demand.

“If we start to see more restrictions coming and lockdowns, then that could obviously have a negative impact on the market,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.