TORONTO -- Losses in the key energy and materials sectors kept Canada's main stock index from getting the lift enjoyed by two U.S. markets ahead of weekend G20 talks.
The S&P/TSX composite index closed down 4.49 points to 16,307.73 while the Canadian dollar hit a more than four-month high.
In New York, the Dow Jones industrial average was down 10.24 points at 26,526.58. But the S&P 500 index gained 11.14 points at 2,924.92, while the Nasdaq composite was up 57.79 points at 7,967.76.
Investors are eagerly awaiting G20 meetings this weekend where U.S. President Donald Trump and his Chinese counterpart, Xi Jingping, will seek a resolution to their trade war, says Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel Inc.
"The markets are going into this weekend's meetings with the expectation that some resolution will be met," he said in an interview.
Still, there were conflicting signs ahead of the meeting.
Markets initially gained on Chinese reports that an agreement was being discussed to avert U.S. tariffs on an additional US$300 billion worth of Chinese imports. But then White House economic adviser Larry Kudlow said Washington may proceed with more tariffs.
Pashootan said Kudlow was trying to manage expectations.
"The market is pricing in more than just progress. It seems to be pricing in a full agreement given he amount of enthusiasm we've seen as of late," he said.
"So it's really just to recalibrate and have more of a correlation between optimism and really where the discussions are at."
The outcome of the weekend could have a material impact on the U.S. Federal Reserve rate decision in July, he added.
"No deal, higher probability of interest rate cuts; deal there could be a neutralizing effect to rate cuts for July."
The prospect of rate cuts has weakened the U.S. dollar and pushed the loonie to its highest level since Feb. 1. It traded at an average of 76.27 cents US compared with an average of 76.16 cents US on Wednesday.
Four of the 11 major sectors of the TSX fell, led by energy and materials.
"We know that commodities represent a large percentage of the TSX and as a result of the weakness in that sector you're seeing the TSX not participating in the celebrations that the U.S. market is seeing," said Pashootan.
Canadian Natural Resources and Crescent Point Energy Corp. shares were down 3.8 and 3.6 per cent respectively even though crude oil prices were slightly higher.
The August crude contract was up five cents at US$59.43 per barrel and the August natural gas contract was up 5.6 cents at US$2.32 per mmBTU.
Centerra Gold Inc. was the weakest of the miners as the price of gold came off its six-year high.
The August gold contract was down US$3.40 at US$1,412 an ounce and the September copper contract was up 0.1 of a cent at US$2.72 a pound.
