TORONTO — A pullback in the energy and materials sectors, fueled by COVID-19 lockdowns in China’s financial capital, forced the Toronto Stock Exchange’s flagship index to close lower on Monday.
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“It’s probably time for the market to take a break following two weeks of bulls,” said Vincent Tonietto, portfolio manager at Fiduciary Trust of Canada.
The Toronto floor’s S&P/TSX Composite Index lost 28.11 points to close at 21,977.83 points.
In New York, the Dow Jones Industrial Average rose 94.65 points to 34,955.89 points. The broader S&P 500 index gained 32.46 points to 4,575.52 points, while the Nasdaq Composite index grabbed 185.60 points to 14,354.90 points.
The Toronto market has risen more than 4% since the start of the year, while the three major US indices show growth of between 6% and 14% each since March 11.
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The main trigger for Monday’s pullback was the announcement of a lockdown in Shanghai amid a spike in COVID-19 infections. A brief reversal in 5- and 30-year bond yields, which saw the short-term yield rise above that of longer-term bonds, also raised concerns.
In Toronto, the energy sector fell 2.4% as crude oil prices fell 7% on concerns regarding the potential to reduce demand from the world’s second-largest economy.
“It also reminds people that the pandemic is not over yet (…) It may be less in the headlines, but it is still there, so it remains a risk”, observed M Tonietto during an interview.
On the New York Commodity Exchange, crude oil prices tumbled US$7.94 to US$105.96 a barrel, while natural gas returned US$7.3 cents to US$5.54. million BTUs.
The price of gold fell US$14.40 to US$1939.80 an ounce and that of copper rose 2.7 cents US to US$4.73 a pound.
In the currency market, the Canadian dollar traded at an average rate of 79.41 cents US, down from 79.99 cents US on Friday.
The Canadian Press
