Despite cooler-than-expected U.S. wholesale inflation data, the selloff in the Canadian stock market intensified on Thursday as investors remained concerned about the escalating Canada-U.S. trade war and rising geopolitical tensions in the Middle East. The S&P/TSX Composite Index plunged by 400 points, or 1.1%, to settle at 35,506, marking its lowest closing after July 31.
Even as signs of easing inflationary pressures from the south of the border lifted financial stocks, steep declines in all other key sectors, including mining, utilities, and real estate, pulled the TSX benchmark lower for the fourth consecutive session.
Top TSX Composite movers and active stocks
As metals prices tanked sharply, Canadian mining stocks like Trekor Metals, Capstone Copper, NGEx Minerals, and AbraSilver Resource fell by at least 8.5% each, making them the worst-performing TSX stocks for the day.
Shares of Aya Gold & Silver (TSX: AYA) were also among the day’s bottom performers on the Toronto Stock Exchange, as they slipped by 4.7% to $39.32 per share. This weakness in AYA stock came a day after the company released an updated preliminary economic assessment for its Boumadine project in Morocco.
The latest study more than doubled the project’s after-tax net present value to US$3.5 billion, with a 93% internal rate of return and a 0.7-year payback period. However, the improved economics partly reflected higher gold and silver price assumptions, while its estimated initial capital costs rose 4% to US$463 million. These factors, coupled with falling metals prices, seemingly weighed on AYA stock despite the significant improvement in Boumadine project’s estimated economics.
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In contrast, Bird Construction, Cargojet, 5N Plus, and International Petroleum were the session’s top-performing TSX stocks, with each climbing by at least 1.9%.
Based on their daily trade volume, Enbridge, Canadian Natural Resources, Telus, Cenovus Energy, and TC Energy were the five most active stocks on the exchange.
TSX today
Crude oil and natural gas prices fell sharply in early trading on Friday, while metals prices remained largely mixed. Given these mixed commodity market signals, TSX energy stocks could remain under pressure at the open today, potentially adding to the broader market’s recent losing streak.
While no major domestic economic releases are due, Canadian investors will closely watch the monthly consumer inflation report and consumer sentiment data from the United States this morning.
Meanwhile, investors may want to keep an eye on the escalating Canada-U.S. trade dispute as another round of U.S. tariffs approaches. New 50% tariffs on several Canadian products, including aluminum bars and rods, certain paper products, and iron and steel goods, are scheduled to take effect on September 15.
With formal Canada-U.S. trade talks still on hold, uncertainty around further retaliation could keep trade-sensitive Canadian stocks in focus. In addition, ongoing fighting in the Middle East could continue to drive volatility in energy prices and influence TSX sentiment throughout the session.