Canadian Stock Index Declines Amid Prolonged Tariff Uncertainty

(RTTNews) - Canadian stocks fell steeply on Wednesday as month-long US-Canada trade talks have not yielded any breakthrough so far despite the August 1 deadline ending the day after tomorrow.

After opening a little lower than yesterday's close, the benchmark S&P/TSX Composite Index moved up to reach an intraday high of 27,581.23 within an hour. However, unable to hold on, the index fell into negative territory and finally closed at 27,369.96, down by 169.92 (or 0.62%).

Last Friday, the US President Donald Trump had hinted that the US may not have a lot of luck with Canada on trade talks and added that Canada may have tariffs instead of negotiations.

In response, PM Mark Carney reassured the nation that he would sign a deal with the US without affecting the domestic business interests although it may require agreeing to some of the tariff imposition.

With the August 1 deadline for "reciprocal tariffs" suspension period very close by, Canada is battling intensely to find a common path with the US to continue its trade without losing heavily.

Currently, Canada stands to suffer 35% flat levy on all its exports to the US.

That aside, with steel and aluminium exports hit by 50% tariff, soon copper exports stand to suffer 50% levy.

Despite no breakthrough happening out of the month-long negotiations, Canadian business houses do not foresee a "worst-case scenario" and are not preparing for any recession within the country as highlighted in a recent survey.

Carney himself had reassured the nation that there is a "landing zone that is possible" even though the negotiations are tough.

The Bank of Canada today maintained its target for the overnight rate at 2.75% with the Bank Rate at 3% and the Deposit Rate at 2.70%. The bank has signaled that it is ready to slash rates again should conditions warrant.

The US Fed kept interest rates unchanged today though two Fed governors voted against the decision, suggesting signs of internal disagreement.

Major sectors that lost in today's trading were Materials (2.09%) and Healthcare (2.56%).

Industrials, Consumer Discretionary, Communication Services, Consumer Staples, Energy, IT, and Financials were the other major sectors that lost ranging from 0.20% to 0.64%.

Among the individual stocks, Bausch Health Companies Inc (5.95%), Hudbay Minerals Inc (6.55%), G Mining Ventures Corp (5.47%), Orla Mining Ltd (5.24%), and Aya Gold and Silver Inc (5.16%) were the notable losers.

Utilities (0.16%) and Real Estate (0.13%) were the only major sectors that gained in today's trading.

Among the individual stocks, Transalta Corp (1.86%), Canadian Utilities Ltd (1.23%), Parex Resources (6.34%), Toromont Ind (4.72%), and Tamarack Valley Energy (2.63%) were the prominent gainers.