Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
The rebound in Canada's main stock index was short-lived as it pushed lower Friday to end a third-consecutive losing week amid concerns about impending action by the U.S. Federal Reserve.
The S&P/TSX composite index closed down 128.76 points to 20,633.27 despite hitting an intraday high of 20,825.21. The Toronto market had a strong morning start after posting its best performance in 10 months Thursday. It then lost ground throughout the session before recovering a bit approaching the close.
The TSX was down 2.3 per cent on the week but is up 18.4 per cent so far in 2021.
In New York, the Dow Jones industrial average was down 59.71 points at 34,580.08. The S&P 500 index was down 38.67 points at 4,538.43, while the Nasdaq composite was down 295.85 points or 1.9 per cent at 15,085.47.
Investors have been jittery this week in response to the more hawkish comments from the U.S. central bank around speeding up the tapering of bond purchases at the same time as a new COVID-19 variant has surfaces and economic activity is slowing, said Greg Taylor, chief investment officer of Purpose Investments.
“The risk this week is around the Fed making a policy error,” he said in an interview.
Taylor said investors have been nervous in the last few days about the Fed taking away stimulus while the economy in the rest of the world slows down a little bit.
Canadian markets have been somewhat insulated by strong bank earnings.
The heavyweight financials sector was slightly lower on the day, led by a 4.4 per cent drop by Canadian Western Bank. That was partially offset with BMO and CIBC rising 2.4 and 2.1 per cent, respectively, as the Canada's big banks wrapped up strong quarterly reports that saw them each boost dividends.
Telecommunications was the only sector on the TSX to close higher on Friday.
The broad-based decrease on the TSX was led by health care and the technology sector, which sustained even stronger declines in the U.S.
Tech dropped 2.5 per cent as shares of Hut 8 Mining Ltd. fell 10.8 per cent while Lightspeed Commerce Inc. was down 7.7 per cent and Shopify Inc. was 2.4 per cent lower.
There was a disconnect in the sector's movement because bond yields were weaker, which is typically a supportive move for these companies.
Big tech stocks have really come under pressure in the last few days as previous pandemic winners such as DocuSign Inc. suffered a 42 per cent decline, Taylor said. 42.2
After starting the day higher, energy lost 0.3 per cent as crude oil prices fell.
The January crude oil contract was down 24 cents at US$66.26 per barrel after climbing as high as US$69.22 in the morning. The January natural gas contract was up 7.6 cents at US$4.13 per mmBTU.
Suncor Energy Inc. and Cenovus Energy Inc. led the declines, losing 2.1 and 1.7 per cent, respectively.
The Canadian dollar traded for 78.05 cents US compared with 78.03 cents US on Thursday.
Materials also fell as copper prices softened while gold was stronger as shares of Lithium Americas Corp. lost 8.7 per cent.
The February gold contract was up US$21.20 at US$1,783.90 an ounce and the March copper contract was down 3.2 cents at nearly US$4.27 a pound.
Earlier, the United States and Canada posted November employment numbers. U.S. non-farm payrolls disappointed as they increased by 210,000 jobs, far below forecasts for about 550,000 jobs. However the unemployment rate fell to 4.2 per cent, the lowest since February 2020.
In Canada, the jobless rate fell to six per cent as 153,7000 jobs were added as the share of the core working population with a job climbed to an all-time high.
Taylor said markets were at risk coming into the week.
“We haven't had a correction in a long time and were due for some volatility. The question will be when will buyers step back in.”
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This report by The Canadian Press was first published Dec. 3, 2021.
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
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