Canada’s resource-heavy stock index fell at the market open on Tuesday as a decline in gold prices pushed the material sector lower, while investors awaited results from the country’s top lenders later in the week.
At 10:02 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 25.6 points, or 0.13%, at 20,325.46. Canadian markets were closed on Monday for a public holiday.
Materials sector fell 1.4%, tracking declines in base and precious metals amid rising bets for higher interest rates.
The composite banking sector was down 0.02%.
Market analysts broadly expect domestic banks to report a rise in bad debt provisions and highlight risks from commercial property loans when they report earnings this week.
“Investors are expecting some fairly challenging quarters and a little bit maybe challenging commentary on the outlook,” said Mike Archibald, vice-president and portfolio manager at AGF Investments Inc, noting “the big catalyst for Canadian markets this week is going to be bank earnings.”
Canadian equities have been trading in tight range since late April, with the TSX logging a fourth-straight weekly decline in the previous week.
Sticky inflation, broader uncertainty over the U.S. debt deal and worries about a weak demand outlook for commodities have weighed on sentiment, lately.
Among other movers, Bausch Health Companies Inc rose 5.0% after brokerage Jefferies lifted its price target to $9.5 from $7.
Africa Oil Corp surged 7.3%, its best day in over seven months after the energy firm announced withdrawal from its Kenya project, following which Barclays turned bullish on the stock.
Brokerage Scotiabank raised rating on MEG Energy Corp, sending shares of the oil explorer 2.9% up.
Meanwhile, Canada’s producer prices fell 0.2% in April from the previous month, on lower prices for refined petroleum energy products and softwood lumber, a StatsCan report showed.
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