TSX drops as gold price pulls materials sector down

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TORONTO – Canada’s main stock index lost more than 100 points on Tuesday as the price of gold fell and dragged the materials sector to the Toronto Stock Exchange.The S & P / TSX Composite Index lost 108.49 points to 16,497.01.

The materials sector, which includes large gold miners, was the worst performer on the index. The sector’s stocks lost an average of 5.89 percent of their value as the price of gold, which recently experienced several record days, fell.

The December gold contract fell US $ 93.40 to US $ 1,946.30 an ounce.

“I think you generally have a sense of risk today,” said Natalie Taylor, portfolio manager at CIBC Asset Management.

“You see great strength in cyclics and weakness in some of your defensive sectors.”

Weakest defensive sectors for the day included utilities – down 0.45% – and technology – down 0.87%. The health care sector also fell 2.62 percent, the second-largest loss in an industry on Tuesday.

Meanwhile, strength has appeared in cyclical sectors, she said, including the financial sector – up 1.45% – and consumer discretionary – up 1%. They were the two biggest winners of the day on the Toronto Stock Exchange.

That sense of risk came from Tuesday’s headlines that give the impression that the economy continues to recover from the COVID-19 pandemic, she said. That includes US President Donald Trump who has announced he is considering a capital gains tax cut, as well as Russia approving a coronavirus vaccine.

South of the border, the main indices also ended the day in the red.

The Dow Jones Industrial Average fell 104.53 points to 27,686.91. The S&P 500 Index lost 26.78 points to 3,333.69, ending seven straight days of gains that left it on Monday within one percent of breaking a February record.

The Nasdaq composite fell 185.53 points to 10,782.82 as it sensed weakness in tech stocks.

The Canadian dollar traded against 75.24 US cents, down from 74.88 US cents on Monday.

Elsewhere in commodities, the September crude contract fell 33 cents to US $ 41.61 per barrel and the September natural gas contract gained nearly two cents to US $ 2.17 per mmBTU. The September copper contract gained about a dime to nearly US $ 2.88 a pound.

– With an Associated Press file



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