Canada’s commodity-heavy main stock index fell on Monday, as energy stocks tracked oil prices that declined on concerns over demand from major consumer China, while weakness in pot producers weighed on healthcare shares.
At 9:50 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 70.77 points, or 0.32%, at 21,935.17, after marking its longest weekly winning streak since December in the last session.
The energy shares dropped 2.6% as oil prices tumbled more than $6 on fears over weaker fuel demand in China following lockdown measures in the country’s financial hub, Shanghai, aimed at curbing a surge in COVID-19 infections.
Oil slides on concerns of weaker Chinese demand
However, the sub-index was set for its fourth consecutive monthly gain.
“The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure,” said Russ Mould, director at AJ Bell.
The ongoing Russia-Ukraine war, concerns around soaring inflation have roiled global markets in recent months, however, the TSX was set for its best monthly gain since Oct. 2021, buoyed by surging commodity prices.
The healthcare sub-index fell 5.5%, retreating from over a month high hit in the prior session, as pot producers including Tilray Brands, Aurora Cannabis, Canopy Growth and Cronos Group fell between 5.8% and 8.2%.
Investors awaited a hearing on cannabis decriminalization bill by the U.S. House of Representatives due later in the day.
The financial sector, which accounts for nearly 30% of the Toronto market’s value, fell 0.1%, while the industrial sector rose 0.4%.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2.0% as a spike in U.S. Treasury yields, a stronger dollar and hopes of progress in Russia-Ukraine peace talks dented demand for bullion.
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