Canada’s main stock index fell on Tuesday, reversing a record high, as falling oil prices evaluated on the energy sector and investors analyzed bank earnings forecasts following conflicting results from several of the country’s top lenders.
Toronto Stock Exchange Fell
After closing at a record high on Monday, the S&P/TSX composite index on the Toronto Stock Exchange fell 89.01 points, or 0.4%, to 23,259.96. “With a slowing Canadian economy, there is more likely downside pressure on bank earnings going forward,” said Macan Nia, co-chief financial strategist at Manulife Investment Management.
Canadian GDP data, which is due on Friday, is projected to show that GDP was growing at an annualized pace of 1.6% in the second quarter, which is lower than the central bank’s estimate of potential growth of approximately 2.4%.
Price Of Oil
Shares of Bank of Montreal dropped 6.5% following the lender’s announcement of a lower-than-expected profit and a warning that it would need to keep setting aside funds for loans that are unlikely to be repaid.
Although the price of oil ended the day 2.4% lower at $75.53 a barrel due to concerns that slower economic growth in the U.S. and China may reduce demand for energy, shares of Bank of Nova Scotia fared better, rising 2.5 percent. The materials group, which includes fertilizer companies and metal miners, also ended lower, falling 0.7%. Real estate was the exception, rising 1% to trade at its highest level since February 2023.
