Markets

Canadian Market Retreats After Positive Start; Materials Shares Rally

(RTTNews) - After opening higher, thanks to strong buying in the materials section, the Canadian stock market retreated and slipped into negative territory Friday morning.

The mood is cautious amid concerns about global growth due to spikes in coronavirus cases in several countries across Europe.

Data showing Canada's economy saw a strong growth in the month of June contributed as well to market's positive start. According to Statistics Canada, the Canadian economy grew 6.5% over a month earlier in June of 2020, surging from an upwardly revised 4.8% percent expansion and beating market expectations of a 5.6% advance.

The data showed the Canadian economy shrank 11.5% on quarter in the three months to June 2020, the most on record, following a 2.1% decline in the previous period. Household spending tumbled at a record 13.1%, amid job losses and limited opportunities to spend due to closures of stores and restrictions on travel. The data also showed that business investment plunged 16.2%, the most since series began.

Real GDP slumped 38.7% on an annualized basis, after shrinking 8.2% in the first-quarter. Economists had expected real GDP to plunge 39.6%.

Higher bullion prices pushed up materials stocks. Shares from healthcare, information technology and energy sections too are finding some support, while consumer staples and financial shares are weak.

The benchmark S&P/TSX Composite Index, which advanced to 16,683.38 earlier in the morning, slipped toa low of 16,781.85 subsequently, and is now down 37.60 points or 0.22% at 16,693.89.

Among the stocks that have declined sharply on huge volumes, OceanaGold Corporation (OGC.TO) shares are down more than 8.5%. Sun Life Financial (SLF.TO) and Toronto-Dominion Bank (TD.TO) are down 1.6% and 1.1%, respectively.

BCE Inc. (BCE.TO), Fortis Inc. (FTS.TO), Canadian National Railway (CNR.TO), Canadian Pacific Railway (CP.TO), Bank of Montreal (BMO.TO), Bank of Nova Scotia (BNS.TO) and Royal Bank of Canada (RY.TO) are down 0.9 to 1.4%.

Among the gainers, Canadian Western Bank (CWB.TO) is gaining about 5.5%. The CWB group reported third quarter net income available to common shareholders of $62 million and adjusted earnings per common share of $0.74, up 21% and 23%, respectively, from the previous quarter.

Kinross Gold Corp (K.TO) is rising nearly 4.5%, Barrick Gold Corporation (ABX.TO) is up 2.7%, Air Canada (AC.TO) is advancing 2.5% and Shopify Inc. (SHOP.TO) is moving up 1.4%.

Methanex Corporation (MX.TO) is surging up 5.8%. Lightspeed Pos (LSPD.TO), Pan American Silver Corp (PAAS.TO), Kirkland Lake Gold (KL.TO), Rogers Communications (RCI.A.TO) and Agnico Eagle Mines (AEM.TO) are up 2.5 to 4.3%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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