Canada’s main stock index fell on Friday, as materials stocks declined and signs of credit stress at U.S. regional lenders sparked concerns.
At 10:03 a.m. ET, Toronto’s S&P/TSX composite index was down 0.8% at 30,224.71 points. The index is still set for modest weekly gains.
The decline came after two American lenders disclosed loan fraud on Thursday, driving concerns around credit quality, prompting sharp sell-offs on both Wall Street and the TSX.
However, markets found some support after U.S. President Donald Trump on Friday confirmed that his meeting with Chinese President Xi Jinping remained on schedule. Trump also said that proposed 100% tariffs on Chinese imports would not be sustainable.
Further tempering the negative sentiment, several U.S. regional banks on Friday saw their shares rise on the back of positive quarterly results.
“While U.S. banking stress has caused some concern, I don’t think it’s cause to raise any red flags right now - it’s just something to monitor as earnings season gears up,” said Michael Constantino, CEO of online investment platform Webull Canada.
On the TSX, materials shares fell sharply, down 4.5%, as gold prices retreated following Trump’s conciliatory comments on China. Despite Friday’s pullback, the sector has been this week’s standout performer, rising 3.8%.
The weakness in crude prices has put the energy sector on track for a weekly decline exceeding 2% and a 0.2% decline on the day.
Bucking the downward trend, consumer staples and consumer discretionary sectors showed strength, rising 0.4% and 0.1% respectively. Industrials also performed well, gaining 0.3%.
Information technology stocks gained 0.1%, and was up 3.8% for the week.
Among individual stocks, Canadian near-commercial lithium producer Standard Lithium tumbled 23.7% after announcing the pricing of an upsized $130 million stock offering plan.
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