TSX down as oil prices fall on easing tensions with Iran; U.S. markets also lower
This is a file image of various stocks.
Ross Marowits, The Canadian Press
Published Tuesday, July 16, 2019 12:45AM EDT
Last Updated Tuesday, July 16, 2019 5:40PM EDT
TORONTO -- North American stock markets were all down Tuesday with Canada's main stock index inching lower as oil prices fell on signs of easing geopolitical risks in the Middle East.
The S&P/TSX composite index closed down 8.40 points at 16,502.42 after hitting a low of 16,467.13.
Seven of the 11 major sectors were down on the day, led by the energy sector. It fell 1.6 per cent, with Husky Energy Inc. and Canadian Natural Resources losing 2.6 and 1.9 per cent respectively.
Shares in the key sector were awash in red as the August crude contract was down US$1.96 at US$57.62 per barrel and the August natural gas contract was down 10.2 cents at US$2.31 per mmBTU.
Prices fell on the potential for easing tensions as Iran's foreign minister for the first time suggested his country's ballistic missile program could be on the table for negotiations with the U.S.
"To the extent that the tensions there drop you would certainly see an impact to the oil price as well," said Anish Chopra, managing director with Portfolio Management Corp.
Technology was down along with telecommunications while industrials climbed 1.4 per cent as CP Rail shares hit an all-time high after it beat analyst expectations by posting record second-quarter revenues and net income jumped more than two-thirds to $724 million.
Materials was also higher even though shares of Turqoise Hill Resources Ltd. plummeted 43.2 per cent after news of expected delays and cost overruns at a major mine project in Mongolia. The Vancouver-based company, 50.8 per cent owned by mining giant Rio Tinto Group, says the underground Oyu Tolgoi mine could be delayed by 16 to 30 months and cost between US$1.2 billion and US$1.9 billion more than expected.
The August gold contract was down US$2.30 at US$1,411.20 an ounce and the September copper contract was down 1.1 cents at US$2.70 a pound.
The Canadian dollar traded for an average of 76.62 cents US compared with an average of 76.69 cents US on Monday.
In New York, the Dow Jones industrial average was down 23.53 points at 27,335.63. The S&P 500 index was down 10.26 points at 3,004.04, while the Nasdaq composite was down 35.39 points at 8,222.80.
U.S. markets fell after President Donald Trump said in a cabinet meeting that trade talks with China have a long way to go.
Stronger-than-expected U.S. retail sales numbers in June also prompted markets to question the size and timing of expected interest rate cuts.
"I think the market has now come to some consensus that it would be 25 basis points if they cut as opposed to when we looked a few weeks ago the thought that it could be as high as 50 basis points at the July meeting," Chopra said in an interview.
He said the Federal Reserve will be constantly reviewing new data and making adjustments to their decision.
"If you continue to get strong economic numbers, investors would have to adjust their expectations for rate cuts in the future."