CANADA STOCKS-TSX drops as energy, material stocks fall

(Updates prices, adds analyst comments)

Nov 15 (Reuters) – Canada’s main stock index fell on Monday, weighed by losses among energy stocks and precious metal miners, although upbeat economic data out of China limited losses.

At 9:50 a.m. ET (14:50 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 69.8 points, or 0.32%, at 21,698.73.

“Overall the general outlook is still looking pretty good for Canadian equities, however, because of the heavy influence of commodity prices, the index is easily affected when prices weaken,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

The energy sector dropped 2.2% as crude oil prices fell on expectations of increasing supply, while higher energy costs and rising COVID-19 cases are also seen weighing on demand.

The materials sector lost 1.1% after rising for eight consecutive sessions.

Canada’s benchmark has gained around 24.4% this year on support from elevated commodity prices, in-line with the growth in the S&P 500 index.

“We are entering a period which historically has been a favourable time for stocks and unless central banks do not make any drastic moves when it comes to policy tightening, we expect the market to do well,” Cieszynski added.

The Bank of Canada will not raise its benchmark interest rate until the slack in the country’s economy is absorbed, which has not yet happened but is getting closer, Governor Tiff Macklem said in a newspaper opinion piece.

Among stocks, Burger King-parent Restaurant Brands International Inc gained 1.4%. The company said it would buy U.S. restaurant chain Firehouse Subs for $1 billion in an all-cash deal.

Pot producer Trulieve Cannabis Corp surged 10.3% after it reported a 64.4% jump in quarterly revenue.

HIGHLIGHTS

The TSX posted nine new 52-week highs and no new lows.

Across all Canadian issues there were 76 new 52-week highs and one new low, with total volume of 64.62 million shares.

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