TSX falls more than one percent on U.S. political risk

Mon Jan 30, 2017 5:21pm EST
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell more than 1 percent to a nearly two-week low on Monday, with losses broad based after a travel curb ordered by U.S. President Donald Trump triggered a rethink by investors of U.S. political risk.

Wall Street also lost ground after an executive order issued by Trump on Friday banned immigration from seven Muslim-majority countries. Over the weekend, thousands of people rallied in major U.S. cities and at airports in protest.

"People are starting to think well if this is generating this kind of chaos over a weekend, what happens when he (Trump)starts picking the more serious trade fights with Mexico, with China, with other countries and what happens if Canada gets sideswiped," said Colin Cieszynski, senior market analyst at CMC Markets Canada.

The Toronto Stock Exchange's S&P/TSX composite index closed down 170.69 points, or 1.1 percent, at 15,405.12, its lowest close since Jan. 18.

"There is always the risk that Canada could get caught up in a bigger trade war and I think that is probably why we are seeing the TSX down even more than the U.S. indices today," Cieszynski said.

The S&P 500 lost 0.60 percent.

Lower oil prices were an additional drag on Canada's energy-linked market. U.S. crude oil futures settled 54 cents lower at $52.63 a barrel after another increase in U.S. drilling activity spread concern over rising output. [O/R]

Canadian Natural Resources Ltd declined nearly 3 percent to C$39.10 and the overall energy group slumped to its lowest close since Nov. 11, down 2.4 percent.   Continued...

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