Canada Stocks Fall on Speculation of a Possible Trump Victory

Updated on
  • All industry groups decline as December rate hike looks likely
  • Energy shares hit hard with oil dropping to a 1-month low

TSX Movers: Cameco, Aecon Group, Detour Gold

Canadian stocks tumbled for a second day as investors retreated from equities amid concerns about the upcoming U.S. presidential election and the increased probability of an interest rate hike before the end of the year.

The S&P/TSX Composite Index fell 1.2 percent to 14,594.72 at 4 p.m. in Toronto. All 11 industry groups in the index retreated. Health care shares lost 6.2 percent as Valeant Pharmaceuticals International Inc. was sued over its failed marketing of a female libido pill. Energy stocks also weighed down the gauge as oil dropped to a one-month low after data showed U.S. stockpiles grew. And raw-materials producers snapped a four-day rally as miners dropped 2.3 percent

Oil fell to the lowest level in more than a month after industry data showed U.S. crude stockpiles grew and supplies from OPEC members increased. Among energy shares, TransCanada Corp. tumbled nearly 5 percent to the lowest level since June 2016, after the company announced it’s raising about $6.1 billion to help fund its acquisition of Columbia Pipeline Group Inc.

Gold prices advanced for a fifth day on increased concern over the outcome of the election. Miners ended a four-day rally, falling after the Federal Reserve meetings ended and the probability of a December interest rate hike increased. Barrick Gold Corp. snapped its longest winning streak since July 2016, falling 1.7 percent. Detour Gold Corp. fell 18.8 percent to its lowest level since April 2016 after missing production and revenue estimates.

Lenders slipped as investors crowded into haven assets after a poll on Nov. 1 showed Donald Trump gaining ground against Hillary Clinton. Royal Bank of Canada fell 0.8 percent, sending the country’s largest bank to its lowest level in more than two weeks. Toronto-Dominion Bank fell 0.6 percent.

Valeant led the health care sector lower, falling 9.1 percent on the marketing lawsuit and reports that its exploring a sale of some eye-surgery assets worth $2.5 billion. Yesterday, the shares surged 30 percent after a report said it’s looking to sell the Salix gastrointestinal drug business it acquired last year for $11.1 billion.

Canadian stocks are now 15 percent more expensive than their peers in the S&P 500 Index. The S&P/TSX trades at 22.6 times earnings, compared with 19.7 for the S&P 500 Index. The S&P/TSX is the top performer among developed equity markets tracked by Bloomberg in 2016.

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