The Toronto stock market fell Monday amid news that Ottawa will be holding another auction for wireless spectrum next year to increase competition in the cellphone market.
The S&P/TSX composite index lost 81.88 points to 15,133.08.
Industry Minister James Moore said Monday that the majority of the spectrum will be set aside for new entrants and is part of the government’s efforts to lower the prices of wireless cellphone plans. Shares in the big three telecom giants all reacted negatively to the news, which excludes the big three telecoms from bidding in the auction. Shares in BCE Inc. dropped 15 cents to $48.27, Rogers Communications fell 43 cents to $42.59, while Telus Corp. dipped 49 cents to $39.45.
The telecom sector was one of the leading decliners on the TSX, down by about 0.72 per cent in early trading.
Meanwhile, the Canadian dollar continued to build on strength from last week, up 0.14 of a cent to 99.98 cents (U.S.).
The Bank of Canada is expected to release its latest survey of Canadian businesses. The business outlook, which will be released Monday, is one of the ways the central bank gauges how the economy is faring. It relies on a summary of interviews conducted with senior management at about 100 Canadian firms on topics such as demand and capacity, and how they view future economic activity.
The Canadian dollar is entering the second half of 2014 at almost the 94 cent (U.S.) level, close to its highest point for the year so far and much to the discomfort of the country’s exporters.
Those elevated levels could be tested Friday when Statistics Canada releases June employment data. The agency is expected to report that about 24,000 jobs were created last month compared with 25,800 in May, with the jobless rate remaining unchanged at seven per cent.
Analysts have observed that the dollar’s rise from 89 cents (U.S.) earlier in the year is due to a number of reasons, including rising inflation, data suggesting the outlook for exporters is improving, a better American economic climate and rising oil prices.
U.S. markets were down with the Dow Jones industrials losing 53.11 points to 17,015.15, the Nasdaq dropping 14.45 points to 4,471.48, while the S&P 500 lost 6.06 points to 1,979.38. Wall Street had been closed since midday Thursday for the Independence Day holiday.
Traders will look for hints this week for the pace of future interest rate hikes as the U.S. Federal Reserve releases the minutes of its latest meeting on Wednesday. They will also be looking for corporate results from U.S. resource company Alcoa Inc., which will be kicking off the second-quarter earnings season Tuesday. Alcoa is viewed as an economic bellwether because its aluminum products are used in so many applications.
U.S. banking giant Wells Fargo posts results on Friday.
In commodities, oil fell below $104 per barrel as expectations of increased supply offset strong U.S. job growth. Oil has been sliding since it reached a 10-month closing high of $107.26 on June 20 due to concern about an advance by Islamic militants in controlling Iraqi territory. Since then, it has become clear that there are no imminent disruptions to supplies from Iraq, the second-biggest producer for the Organization of the Petroleum Exporting Countries (OPEC).
On the commodity markets, the August crude contract was down 17 cents to $103.89 a barrel, while August bullion was down $5.70 to $1,314.90 an ounce. August copper $3.25 a pound, down two cents.