TSX falls on U.S. protectionism risk, lower oil prices

Mon Jan 23, 2017 5:08pm EST
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Monday, pressured by lower oil prices and risk of a more protectionist United States under its new president, Donald Trump.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE reached a more than two-year high earlier this month, helped by an agreement in November by major oil producers to cut output and by prospects of U.S. economic stimulus. But the rally has lost some momentum as investor attention shifted to Trump's push to renegotiate the North American Free Trade Agreement.

"That creates a lot of anxiety for Canadian investors," said Ian Scott, equity analyst at Manulife Asset Management.

"I think there is a recalibration here as we get a sense of what this is going to mean for Canada going forward."

The head of a business advisory council to Trump played down the risk to Canada from any changes to NAFTA. Still, Canadian Prime Minister Justin Trudeau and his Cabinet held a two-day retreat in Calgary, Alberta, to discuss U.S. ties.

"The auto suppliers in Canada, they could be at considerable risk if free trade to the (United) States was to be at risk," Scott said.

He favors those companies that are producing in the United States and can benefit from Trump's plans to lower taxes.

The TSX closed down 67.75 points, or 0.44 percent, at 15,480.13.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch