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.
The most influential weights on the index included Canadian Natural Resources Ltd (CNQ.TO), which fell 4.2 percent to C$39.24, and Suncor Energy Inc (SU.TO), down 1.9 percent to C$41.47, while the overall energy group fell 2.9 percent as oil prices dropped.
U.S. crude oil futures CLc1 settled 47 cents lower at $52.75 a barrel as signs of a strong recovery in U.S. drilling overshadowed news that OPEC and non-OPEC producers were on track to meet output reduction goals. [O/R]
Eight of the index's 10 main groups ended lower, with the consumer discretionary and consumer staples groups falling more than 0.6 percent.
The materials group, which includes precious and base metals miners and fertilizer companies, added 1.4 percent, as copper rose amid hopes the Trump administration would make good on a pledge to boost infrastructure spending.
Uncertainty about Trump's economic policies also boosted gold to its highest level in two months and Canada-listed gold miners rose. Barrick Gold Corp (ABX.TO) advanced 3.6 percent to C$23.64.
Gold futures GCc1 rose 0.5 percent to $1,210 an ounce and copper prices CMCU3 gained 0.8 percent to $5,794.85 a tonne. [GOL/][MET/L]
Additional reporting by Alastair Sharp in Toronto; Editing by Bernadette Baum and Matthew Lewis