Canada’s main stock index finished narrowly lower on Tuesday as investors met the re-election of a Liberal government under Prime Minister Justin Trudeau with a muted reaction.
The Toronto Stock Exchange’s S&P/TSX composite index lost 26.93 points, or 0.16 per cent, at 16,391.52.
Mr. Trudeau’s Liberals held onto power after a closely fought election on Monday but were reduced to a minority.
Only four of the index’s 11 major sectors were higher, led by a 0.4-per-cent increase in energy stocks as oil prices increased.
Tech stocks dropped 2.3 per cent, as Shopify Inc. fell 6.2 per cent.
Leading the index were SNC-Lavalin Group Inc., up 14.1 per cent, Gran Tierra Energy Inc., up 7.7 per cent, and Crescent Point Energy Corp., higher by 4.6 per cent.
Lagging shares included Hexo Corp., down 4.5 per cent, and Parkland Fuel Corp., lower by 4.2 per cent.
Stocks on world markets declined, with the S&P 500 turning lower, and the pound weakened on Tuesday after British lawmakers rejected the government’s proposed timetable for passing legislation to ratify a deal over Britain’s exit from the European Union.
U.S. Treasury yields also fell after the vote on British Prime Minister Boris Johnson’s ratification timetable.
Stocks were higher earlier, supported by some upbeat corporate results and talk of progress in the China-U.S. trade negotiations.
“It’s noisy but I don’t think (the Brexit vote is) a big factor,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
“Stocks have done well in the face of all of that stuff, and part of that is because markets are happy with the low interest rate environment, and that’s not likely to be going away soon.”
Also, strong corporate earnings since last week have provided some respite to equity markets, which were rattled over the past few months by geopolitical worries and a slowing global economy.
The Dow Jones Industrial Average fell 38.66 points, or 0.14 per cent, to 26,788.98, the S&P 500 lost 10.6 points, or 0.35 per cent, to 2,996.12 and the Nasdaq Composite dropped 58.69 points, or 0.72 per cent, to 8,104.30.
The pan-European STOXX 600 index rose 0.09 per cent and MSCI’s gauge of stocks across the globe shed 0.06 per cent.
Sterling was last trading at $1.2876, down 0.63 per cent on the day.
In the U.S. bond market, benchmark 10-year notes last rose 8/32 in price to yield 1.7659 per cent, from 1.792 per cent late on Monday.
On the trade front, China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, any problem could be resolved.
That followed upbeat comments on Monday by the White House. U.S. President Donald Trump said efforts to resolve the U.S.-China dispute were going well, while White House economic adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.
Oil prices rose on Tuesday after China signaled progress in trade talks with the United States, but gains were capped by forecasts of a buildup in U.S. crude stockpiles.
Brent crude oil settled up 74 cents, or 1.3 per cent at $59.70 a barrel, while U.S. West Texas Intermediate crude was 85 cents, or 1.6 per cent, higher at $54.16 per barrel.
Washington and Beijing have made progress in trade talks, China’s Vice Foreign Minister Le Yucheng said, and problems can be resolved as long as both sides respect each other.
“While the encouraging mood across financial markets will remain stimulated by trade optimism, risk aversion could still make an abrupt return should talks drag on or turn sour,” said Lukman Otunuga, analyst at FXTM.