TSX falls broadly as U.S. presidential debate looms

Mon Sep 26, 2016 5:02pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's benchmark stock index fell in a broad retreat on Monday, tracking U.S. indexes lower as investors took a cautious turn ahead of the first U.S. presidential debate and as energy shares failed to move higher with a bounce in crude oil prices.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 78.47 points, or 0.53 percent, at 14,619.46.

The three main Wall Street indexes all shed at least 0.85 percent, as investors focused on how Republican presidential hopeful Donald Trump would fare in a televised debate against Democrat Hillary Clinton, which could rank as one of the most-watched and highly-anticipated political showdowns in U.S. history. [.N]

"People are getting just a little bit more defensive ahead of the debate tonight, and may be raising a little bit of cash in anticipation of some volatility if the earnings season is weak," said Manash Goswami, a portfolio manager at First Asset Investment Management.

Valuations have pushed ahead of fundamentals, he added, raising the risk that the TSX may fall further from here.

"Either earnings and economic data needs to start to really tick up or the market needs to pull back. It's one or the other," Goswami said.

In Canada, heavyweight financial stocks led the losses, while consumer names also fell.

Valeant Pharmaceuticals International Inc (VRX.TO: Quote) lost 6.3 percent to C$34.25. The company has previously been criticized by Clinton over its drug pricing strategy.   Continued...

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