Canada’s main stock index fell slightly on Friday following a Globe and Mail report that a North American Free Trade Agreement (NAFTA) deal with the United States might not be concluded by the end of the day.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 30.59 points, or 0.19 per cent, at 16,340.96.
Canada and the United States will make a final push to iron out differences on a pact to revamp the NAFTA by the Friday deadline set by U.S. President Donald Trump.
However, Canada’s government officials have expressed concern that a final trade pact will not be reached within the deadline.
There was a rebound in global trade worries following a report on Thursday that Trump was preparing to step up a trade war with Beijing by imposing tariffs on $200-billion more in Chinese imports by end of next week.
Seven of the index’s 11 major sectors were lower, led by the energy sector’s 1-per-cent drop as oil prices were pressured by trade worries.
Canadian Natural Resources Ltd. fell 1.8 per cent and Cenovus Energy Inc. declined 2.2 per cent, among biggest lags on the energy index.
The heavyweight financials sector slipped 0.1 per cent. Biggest drags on the index were Royal Bank of Canada , Bank of Montreal and Manulife Financial Corp’s declines between 0.3-0.8 per cent.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.1 per cent as gold futures rose 0.4 per cent to $1,202.5 an ounce. Copper prices declined 0.6 per cent to $6,027.5 a ton.
The S&P 500 and the Dow Jones Industrial Average were little changed on Friday as jitters over ongoing trade talks between the United States and other major economies weighed, but gains in Apple and Amazon lifted the Nasdaq.
“Traction gained from negotiations with Mexico and Canada in the past couple of weeks are leading to some optimism ... what we are seeing is light trade ahead of the Labor day holiday weekend,” said Steven Violin, senior vice president at F.L.Putnam Investment in Wellesley, Massachusetts.
The Dow Jones Industrial Average was down 38.24 points, or 0.15 per cent, at 25,948.68, the S&P 500 was down 2.26 points, or 0.08 per cent, at 2,898.87 and the Nasdaq Composite was up 15.48 points, or 0.19 per cent, at 8,103.84.
The main indexes are still near record levels, coming off a solid earnings season and supported by data pointing to a strong U.S. economy.
Apple rose 1.1 per cent, extending its gains for the seventh day, while Amazon.com Inc. rose 0.4 per cent, topping $2,000 for the second day in a row to renew its push to join Apple in the $1 trillion market cap club.
Seven of the 11 major S&P 500 sectors were lower, with the energy sector leading declines with a 0.83-per-cent drop.
The financial index fell 0.45 percent with JPMorgan down 1 per cent, Goldman Sachs off 0.3 per cent and Citigroup falling 0.9 per cent.
Oil prices slipped on Friday, pressured by renewed concerns that a global trade war could dent energy demand, although impending U.S. sanctions on Iran and falling Venezuelan output limited the decline.
Benchmark Brent crude oil was down 37 cents at $77.40 a barrel. U.S. light crude was 19 cents lower at $70.10. For the week, both benchmarks were on track to gain about 2 per cent.
Oil “appears to be following equities lower amidst renewed U.S./Chinese tariff concerns that could easily escalate in slowing global economic growth and, hence, world oil demand,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
The MSCI Emerging Markets index fell for a second day as a report that U.S. President Donald Trump was preparing to step up a trade war with Beijing dampened risk appetite and erased some gains from a rally this week. In the previous session, concerns about Argentina’s currency weakening had also weighed on the outlook for emerging markets.
Trump threatened on Thursday to withdraw from the World Trade Organization and impose tariffs on $200 billion more Chinese imports.
“We feel that some profit taking prior to month’s end should be expected given the magnitude of the recent advance and today’s softening in the equity markets,” Ritterbusch said.
Oil analysts polled by Reuters cut their price forecasts for 2018 in August, for the first time in almost a year, on growing concerns about global trade. A Reuters survey of 45 economists and analysts forecast Brent would average $72.71 in 2018, 16 cents below the $72.87 projected in July but above the $71.96 average so far this year.
Reuters