Materials stocks push Toronto shares lower

Canada’s main stock index fell on Tuesday, with materials leading declines as prices of most metals fell on a firmer U.S. dollar and rating agency Moody’s cut its outlook on China’s government credit ratings.

At 9:44 a.m. ET (1444 GMT), the Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) was down 23.57 points, or 0.12%, at 20,386.64.

The materials sector (.GSPTTMT), which houses Canada’s major mining firms, dipped 1.0% as gold prices fell on a firmer dollar and copper prices fell to one-week lows after Moody’s cut its outlook on top metals consumer China’s credit ratings to negative from stable.

The benchmark Canadian index comes off a stellar November, logging monthly gains of over 7% as hopes grew that global central banks are most likely done with interest rate hikes and could look at rate cuts next year.

“We had a huge November, and now we’re seeing a bit of a market correction,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

“News flow has gotten a little bit quieter, so there’s really been nothing new to push the market higher.”

Meanwhile, a separate reading showed the downturn in Canada’s service sector deepened in November.

The loonie dipped 0.4% against the greenback, while Canadian government bond yields fell, tracking a decline in their U.S. counterparts.

In the United States, investor attention will be on a bunch of U.S. employment data this week, with the October Job openings number due later in the day.

The November ADP National Employment figures and the more comprehensive November nonfarm payrolls report later in the week will also be awaited.

Eyes would remain on the Bank of Canada, which is widely expected to hold its interest rate steady on Wednesday amid hopes that the central bank is likely done with interest rate hikes.

On the company front, North West Company (NWC.TO) gained 3.8% after RBC raised its price target on the retailer’s stock.

Source: https://www.reuters.com/markets/tsx-futures-decline-lower-metal-prices-us-data-tap-2023-12-05/