Canada Stocks Tumble as Trump Trade Concerns Spread, Oil Falls

Trump Trade: Does the Rally Have Legs?

Canadian stocks plunged the most in five months as earnings and dividend disappointments among gold companies, along with weakening oil prices and trepidation over President Donald Trump’s border tax proposals, erased two-thirds of this year’s rally.

The S&P/TSX Composite Index fell 1.7 percent to 15,521.39 at 2:36 p.m. in New York. All 11 major industry groups were lower, led by energy shares, whose decline extended their 2017 loss past 7 percent. Car components maker Magna International slipped 5.4 percent after saying protectionism and U.S. measures that impede free trade may have a material adverse effect on its operations.

Gold stocks were among the weakest on the S&P TSX, with Torex Gold Resources falling almost 10 percent after being downgraded to hold at Toronto Dominion. Eldorado Gold decreased 8.7 percent following an unexpected fourth-quarter loss. Nevsun Resources, which cut its dividend by 75 percent to 1 cent, slid 8.6 percent after earlier plunging 22 percent.

Canadian consumer prices surged in January on the back of rising gasoline prices and new carbon levies, bringing inflation to the highest in more than two years. The consumer price index advanced 2.1 percent from a year earlier, Statistics Canada reported Friday from Ottawa, up from 1.5 percent in December. Economists had estimated a gain of 1.6 percent, according to a Bloomberg survey.

All but one company in the 22-member consumer discretionary index declined, including Linamar Corp and Hudson’s Bay Co., which lost at least 3.5 percent each.

Health-care shares also declined as the five-share group fell across the board. Losses in ProMetic Life Sciences Inc. and Valeant Pharmaceuticals International weighed on the group as each erased at least 2.5 percent.

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