Canada’s main stock index fell more than 1% on Monday, as investors were averse to taking risks over persistent worries about the global trade war.
The Toronto Stock Exchange’s S&P/TSX composite index was down 1.14% at 24,476.66.
Information technology led the sectoral declines with a 2.9% fall. It was dragged by a 6.7% drop in shares of electronic equipment company Celestica.
Financials, which hold the heaviest weighting on the main index, lost 1%.
U.S. President Donald Trump threatened additional tariffs against Canadian imports on Friday, a day after he delayed implementation of certain levies - the latest in a fluctuating trade policy stance that has stoked investor concerns.
“We continue to see a lot of anxiety around the trade policies and tariffs from the new U.S. administration,” said Angelo Kourkafas, investment strategist at Edward Jones Investments.
“We still have no clarity necessarily about what the end goal is going to be on the trade front.”
TSX inches up, but still set for worst week in nearly 18 months
A Reuters poll found that recession risks were mounting for Mexico, Canada and the U.S. due to chaos around trade duties. Trump, in an interview on Sunday, declined to predict whether the U.S. could face a recession.
Meanwhile, former central banker Mark Carney won the race to become leader of Canada’s ruling Liberal Party and will succeed Justin Trudeau as prime minister.
Carney, who supports dollar-for-dollar retaliatory tariffs in response to Trump’s measures, has argued that he was best placed to oversee trade negotiations with the U.S. President.
Later this week, the Bank of Canada is widely anticipated to deliver a 25 basis points interest rate cut. BofA Global Research expects the central bank to provide additional support to the Canadian economy by cutting rates further.
Among individual stocks, Whitecap Resources fell 13%, making it the worst hit on the TSX, after the Canadian oil producer was set to merge with peer Veren in an all-stock deal valued at C$15 billion ($10.43 billion) including debt.
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