Canada's main stock index fell on Tuesday to its lowest close in nearly seven months, as precious metal miners and technology shares led a retreat in lighter than usual trading volumes with US markets closed for Independence Day. The Toronto Stock Exchange's S&P/TSX composite index, which had been closed for a public holiday on Monday, ended down 51.58 points, or 0.34 percent, at 15,130.61, its lowest since December 6. Volumes were the lightest since May 29.
The most influential movers on the index included major gold miners Barrick Gold Corp, which fell nearly 3 percent to C$20.02, and Goldcorp, which lost 3.1 percent to C$16.20. Gold got a bump from safe-haven buying after a North Korean missile launch. But the precious metal had slumped on Monday to a seven-week low after US manufacturing data boosted expectations the Federal Reserve would raise interest rates again this year.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 1.7 percent, with First Majestic Silver Corp down 6.1 percent at C$10.10. The technology sector also fell 1.7 percent. Losses for the group were consistent with the "recent rotation to value from growth," said Ben Jang, portfolio manager at Nicola Wealth Management.
Investors have worried recently about high valuations attached to sectors such as technology, whose earnings are expected to grow faster than higher yielding stocks. Still, fixed-income like equities such as telecoms, utilities and real estate investment trusts "could get hurt" by higher domestic interest rates, Jang said. Those groups all lost ground after comments by Bank of Canada Governor Stephen Poloz supported the view that the central bank would hike rates as early as next week.
Inflation in Canada should be well into an uptrend by the first half of 2018, Poloz told German newspaper Handelsblatt, adding that policy normalization must begin before price growth hits its target. Seven of the index's 10 main groups ended lower, while the financial services, energy and industrials groups were flat or barely higher.
Some of the country's major banks gained ground but Brookfield Asset Management lost 1.1 percent to C$50.33. The company on Monday placed a formal bid for control of a Brazilian renewable energy company, two people with knowledge of the situation said. US crude prices were up slightly at $47.08 a barrel, having touched their highest intraday in nearly one month.