Bay Street ended lower on Wednesday, with mostly weak global stock markets amid renewed worries about U.S.-China trade war and some disappointing economic data forcing investors to refrain from making significant moves.
Falling crude oil prices and sluggish gold too contributed to market’s weakness. Materials, technology and healthcare stocks drifted lower. Energy and consumer staples stocks too were mostly weak.
The U.S. Federal Reserve today left its interest rates unchanged as widely expected. Citing realized and expected labor market conditions and inflation, the Fed said it decided to maintain the target range for the federal funds rate at 1.75 to 2%.
The benchmark S&P/TSX ended down 57.24 points or 0.35% at 16,376.77, after scaling a low of 16,328.60 and a high of 16,432.17 intraday. On Tuesday, the index closed up by 88.54 points or 0.54%, at 16,434.01.
The Energy Index ended 0.44% down, after having declined nearly 1.2% earlier in the day. Imperial Oil (IMO.TO), Vermilion Energy Inc. (VET.TO), ARC Resources (ARX.TO) and PrairieSky Royalty (PSK.TO) lost 1 to 2%, while Encana Corporation (ECA.TO) ended 1.4% up.
The Capped Materials Index ended 1.35% down. First Quantum Minerals (FM.TO) tumbled nearly 8%, Teck Resources (TECK.B.TO) declined 4.5%, Barrick Gold Corporation (ABX.TO) ended 2.6% down, Gold Corp (G.TO) and Agnico Eagle Mines (AEM.TO) both declined by 1.4%.
The Capped Information Technology Index declined 1.43%. CGI (GIB.A.TO) ended 3.2% down. The company reported net earnings of $288.3 million for the the third quarter ended June. That was up 4.2% compared to net earnings in the
Shopify Inc. (SHOP.TO), Constellation Software (CSU.TO) and Sierra Wireless (SW.TO) also ended weak, while Descartes Systems Group Inc. (DSG.TO), Kinaxis Inc. (KXS.TO) and Celestica Inc. (CLS.TO) gained 1.2 to 1.6%.
The Capped Healthcare Index declined 1.65%. Aphria Inc. (APH.TO) ended more than 8% down. Canopy Growth Corporation (WEED.TO) and Aurora Cannabis Inc. (ACB.TO) declined by more than 2%.
Kinross Gold (K.TO) is declining 0.21 percent and Barrick Gold (ABX.TO) is falling 1.17 percent. Goldcorp (G.TO) is weakening by 0.37 percent and B2Gold (BTO.TO) is losing 0.31 percent. Eldorado Gold (ELD.TO) is down 1.76 percent.
Bank stocks were mostly subdued. Royal Bank of Canada (RY.TO), National Bank of Canada (NA.TO) and Canadian Imperial Bank of Commerce (CM.TO) ended modestly higher.
Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO) ended flat.
Molson Coors Canada (TPX-B.TO) announced that it has entered into a definitive agreement with Canadian cannabis producer Hydropothecary Corp. or HEXO (HEXO.TO). Hydropothecary Corp shares soared more than 11% and Molson gained nearly 5% in the session.
Hydro One Inc. (H.TO) announced today that it has reached a definitive agreement to acquire the business and distribution assets of Peterborough Distribution Inc. from the City of Peterborough, ON, for a consideration of $105 million. The stock declined marginally.
Akumin Inc. (AKU.U.TO) gained 2.3% after the company announced that it has entered into a definitive agreement to acquire a freestanding, fixed-site outpatient diagnostic imaging business located in Florida.
Enercare Inc. shares soared 53%. Brookfield Infrastructure will acquire Enercare in a C$4.3 billion transaction. Enercare shareholders to receive C$29.00 per Enercare common share.
In Canadian economic news, the seasonally-adjusted IHS Markit Canada Manufacturing Purchasing Managers’ Index came in at 56.9 in July, falling only slightly from June’s survey record high of 57.1 and remained indicative of a strong improvement in overall business conditions.
In economic news from Asia, survey results from IHS Markit showed China’s manufacturing activity to have expanded at the slowest pace in eight months in July as export orders declined the most in more than two years. The Caixin Purchasing Managers’ Index fell to 50.8 in July from 51.0 in June, registering its weakest growth since November 2017.
In news from Eurozone, manufacturing activity remained subdued at the start of the third quarter, as initially estimated, final data from IHS Markit showed. The factory Purchasing Managers’ Index rose to 55.1 in July, in line with flash estimate, from 54.9 in June.
The UK manufacturing sector expanded at the slowest pace in three months in July, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed. The manufacturing Purchasing Managers’ Index dropped to 54.0 in July from 54.3 in June.
UK house prices increased at a faster pace in July, data from Nationwide Building Society showed Wednesday. House prices advanced 2.5% year-on-year in July, faster than the 2% rise in June. House price growth was forecast to ease to 1.8%.
The Fed, which held rates unchanged today, said economic activity has been rising at a “strong rate,” compared to the assessment in June that economic activity had been rising at a “solid rate.”
The latest statement also noted the unemployment rate has stayed low after pointing out that the unemployment rate had declined in June.
Additionally, the Fed said the annual rate of inflation currently remains near 2 percent after noting inflation moved close to 2 percent in the previous statement.
Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by much more than expected in the month of July. ADP said private sector employment jumped by 219,000 jobs in July after climbing by an upwardly revised 181,000 jobs in June.
A report from Institute for Supply Management showed that growth in U.S. manufacturing activity slowed by more than anticipated in the month of July. The ISM said its purchasing managers index fell to 58.1 in July after unexpectedly climbing to 60.2 in June.
In commodities, crude oil futures for September were down $0.92, or 1.34%, at $67.84 a barrel. Natural Gas for September was down $0.035, or 1.26%, at $2.747 per million btu.
Gold futures for December, the most active contract, settled at $1,227.60 an ounce, losing $6.00 oe 0.5% for the session.
Silver futures for September were down $0.089 or 0.57% at $15.470 an ounce. Copper futures eased $0.091 or 3.23% to $2.740 per pound, due largely to rising concerns about U.S.-China trade war.
by RTTNews Staff Writer
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