Canada’s main stock index dipped at open on Tuesday led by the materials sector amid brewing Sino-U.S. trade tensions and uncertainty over the future of NAFTA.
The Toronto Stock Exchange’s S&P/TSX composite index was down 36.29 points, or 0.23 per cent, at 16,020.8.
The Canadian dollar was little changed against the greenback on Tuesday, maintaining this week’s narrow range as domestic data showed that housing starts unexpectedly fell in August and talks to renew the NAFTA trade pact were set to resume.
Canadian Foreign Minister Chrystia Freeland will meet U.S. Trade Representative Robert Lighthizer in Washington for another round of talks on the North American Free Trade Agreement, an official said on Monday, as time runs short to seal a deal.
Canada sends about 75 per cent of its exports to the United States, so its economy could be hurt if a deal is not reached.
Canadian housing starts declined to a seasonally adjusted annualized rate of 200,986 units from a revised 205,751 units in July, data from the Canada Mortgage and Housing Corporation showed.
The Canadian dollar was trading nearly unchanged at $1.3170 to the greenback, or 75.93 U.S. cents.
The currency, which was also little changed on Monday, traded in a tight range of $1.3132 to $1.3175. On Thursday, it touched its weakest in nearly seven weeks at $1.3226.
U.S. stocks opened lower on Tuesday, weighed down by fears over the escalating trade spat between the United States and China.
The Dow Jones Industrial Average fell 15.93 points, or 0.06 per cent, at the open to 25,841.14.
The S&P 500 opened lower by 5.56 points, or 0.19 per cent, at 2,871.57. The Nasdaq Composite dropped 29.29 points, or 0.37 per cent, to 7,894.87 at the opening bell.
President Donald Trump on Friday threatened duties on $267-billion of goods on top of planned tariffs on $200-billion of Chinese products. China has vowed to respond if the United States took any new steps on trade.
China has also decided to approach the World Trade Organization next week for permission to slap sanctions on the United States, for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.
“The pressure point today clearly seems to be about trade more than anything else. China’s been playing such a long game and none of that has been good for the markets,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
“Today feels like the day we were expecting yesterday, but the WTO complaint has been stirring up this escalation, which has reignited our concerns about trade in general.”
Shares of trade-sensitive Caterpillar and Boeing dropped 0.7 per cent and 1 per cent, respectively in early trading, the most among Dow Industrials trading premarket.
Boeing earlier raised its estimate for purchase of new planes by China over the next two decades by 6.2 per cent.
Also in focus was Hurricane Florence, now a Category 4 storm that is expected to grow stronger before making landfall on Thursday, most likely in southeastern North Carolina near the South Carolina border.
Oil prices rose on Tuesday as U.S. sanctions squeezed Iranian crude exports, tightening global supply despite efforts by Washington to get other producers to increase output.
Brent crude oil was up 60 cents at $77.97 a barrel by 1130 GMT. U.S. light crude was up 25 cents at $67.79.
“The impact of the U.S. sanctions on Iran is firmly being felt,” said Tamas Varga, analyst at London brokerage PVM Oil. “The biggest worry is obviously the amount of Iranian oil that is disappearing from the market.”
Washington has told its allies to reduce imports of Iranian oil and several Asian buyers, including South Korea, Japan and India appear to be falling in line.