TSX falls as China lockdowns weigh on resource shares


Article content

TORONTO — Canada’s main stock index fell on Monday, pulling back a 5-1/2-month high, as concern about the economic impact of China’s strict COVID-19 policies put pressure on resource shares.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 163.28 points, or 0.8%, at 20,220.49, after posting on Friday its highest closing level since June 9.

Article content

“The impact of China’s latest wave of lockdowns on the domestic and global economy, including the demand for resources, has attracted increased investor scrutiny,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Article content

Wall Street stocks also tumbled after rare street protests that erupted in cities across China over the weekend which were seen as a referendum against President Xi Jinping’s zero-COVID policy.

The Toronto market’s energy sector fell 1.7%, while the materials group, which includes precious and base metals miners and fertilizer companies, ended 2.3% lower.

Heavily-weighted financials also lost ground, falling 1.1%, ahead of the start of bank earnings season on Tuesday.

Canada’s Big Six banks are expected to post a 4% decline in fourth-quarter profits from last year as choppy markets hurt wealth management and a slow deal pipeline dents income from investment banking.

“The wealth management business will be pressured but I expect margin increases, given higher interest rates, and solid balance sheets across the board,” said Angelo Kourkafas, investment strategist at Edward Jones Investments.

Not all sectors declined. Technology rose 0.8%, helped by a gain of 4.4% for the shares of Shopify Inc after the company announced record Cyber Monday sales in the United States.

Among other gainers was Bombardier Inc, with its shares rising nearly 7% to its highest level since November 2021. (Reporting by Fergal Smith; Additional reporting by Johann M Cherian in Bengaluru; editing by Grant McCool)


Source link

Comments are closed.