Canada’s main stock index faced a difficult day on Tuesday, with materials stocks dropping due to challenges in Panama’s mining sector, while energy shares managed to cap losses, thanks to higher oil prices. The S&P/TSX composite index was down 0.12% at 18,834.64, with the index on track for its third consecutive monthly decline, falling over 3.5% in October.
The materials sector slipped 0.6%, primarily due to a sell-off in First Quantum, a copper miner facing continued challenges in Panama. The company is currently facing “unconstitutionality challenges” against the law granting mining concession contracts. This comes after the Panama government announced a referendum to decide on the company’s contract. First Quantum’s shares were down over 13.1%, reaching their lowest levels in nearly three years.
On the other hand, the energy sector managed to add 0.3% on higher oil prices. Despite ongoing concerns regarding the military conflict in the Middle East, investors continued to assess the risks, resulting in a rise in energy shares.
The Canadian economy faced a stagnant phase in August, with GDP data showing no growth. Experts predict that the country likely slipped into a shallow recession in the third quarter due to factors such as high-interest rates, inflation, forest fires, and drought conditions. The Bank of Canada, in response to the slowing economic growth, decided to leave interest rates unchanged.
In the technology sector, there was a decline of 0.2%, mainly driven by a 3.4% decline in BlackBerry shares following the retirement announcement of Chief Executive Officer John Chen. Additionally, Dye & Durham shares lost over 4% as the cloud-based software firm reported its first-quarter results.
Overall, the market was relatively stagnant, with Wall Street also experiencing mixed earnings reports and small gains and losses in the S&P 500, Dow Jones Industrial Average, and Nasdaq composite indexes.
FAQs
1. Why did materials stocks drop in Canada?
Materials stocks dropped in Canada due to the sell-off in First Quantum, a copper miner facing continued challenges in Panama. The stock was down over 13.1% after “unconstitutionality challenges” were brought against the law granting mining concession contracts.
2. What caused the rise in energy shares?
The energy sector saw a rise in shares due to higher oil prices. Despite ongoing concerns about the military conflict in the Middle East, investors assessed the risks and continued to invest in energy stocks.
3. Why did the Canadian economy stagnate in August?
The Canadian economy faced stagnation in August due to various factors, including high-interest rates, inflation, forest fires, and drought conditions. These challenges led to a lack of significant growth, and experts predict a shallow recession in the country’s third quarter.
Sources:
– “Premarket: World shares struggle; yen slides after BOJ policy tweak” (Reuters)