Canada Stocks Halt Two-Day Rally as Banks, Metals Producers Slip

  • Banks fall as bond rout eases, miners drop with metals prices
  • Canopy Growth erases gains to snap seven-day winning streak

Canoe's Taylor: A Lot More Upside for the TSX

Canadian stocks fell after climbing the most in seven weeks, as material producers retreated with metals and banks slipped a second day on speculation gains had gone too far too quickly in the past week.

The S&P/TSX Composite Index lost 0.2 percent to 14,733.22 at 4 p.m. in Toronto, paring earlier losses of as much as 0.6 percent while halting a two-day advance. The equity benchmark is up 13 percent in 2016, making it the top performer among developed markets tracked by Bloomberg. Canadian stocks are about 9 percent more expensive than their peers in the S&P 500 Index.

Global equity markets retreated and the dollar rose against most major peers amid rising speculation the Federal Reserve will raise interest rates in December. Traders are now pricing in 94 percent probability of a rate hike next month, from 68 percent at the start of November, according to data compiled by Bloomberg. 

Financial shares tumbled after leading a rally in equities in the week following Donald Trump’s election win, on speculation his policies will goose domestic economic growth.

Financial services stocks, which make up about a third of the S&P/TSX, fell 0.2 percent to pace declines while six of 11 industries in the index retreated. Trading volume was 4.6 percent higher than the 30-day average. Fairfax Financial Holdings Ltd. and Sun Life Financial Inc. fell at least 1 percent. Bank of Montreal slipped 0.2 percent, falling for the first time in three sessions.

Materials and energy producers lost at least 0.3 percent as crude slipped 24 cents to settle at $45.57 a barrel in New York after a government report showed U.S. supplies rose.

Natural resource producers are the top-performing companies in the Canadian market this year, with materials stocks rallying 40 percent year-to-date on a rebound in commodities prices from gold to crude. Teck Resources Ltd., the nation’s largest diversified miner, is the top stock in the index, up almost six-fold this year as prices for coking coal and zinc have also surged.

Marijuana grower Canopy Growth Corp. ended a heavy day of trading down 15 percent, reversing an earlier gain of as much as 33 percent to halt a seven-day winning streak. Smaller peers Aphria Inc. and OrganiGram Holdings Inc. retreated at least 8.4 percent.

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