Energy stocks dragged down the Toronto Stock Exchange’s main index as the price of oil fell and uncertainty around U.S. President Donald Trump loomed.
The S&P/TSX composite index shed 39.71 points to 15,575.81, with the energy sector registering the biggest losses for the index. Energy stocks dropped, on average, more than 1% cent of their worth.
The price of oil slipped, with the March crude contract dipping US61¢ to US$53.17 a barrel.
Oil prices had a phenomenal year in 2016, bouncing back from the mid-$20 to mid-$55 range, said Sadiq Adatia, chief investment officer at Sun Life Global Investments.
“You got a great run and people might be taking some money off the table,” he said.
Adatia added that investors are likely watching oil output numbers to determine if the OPEC and non-OPEC members that recently committed to decreasing crude production stay true to their word.
Some of the TSX’s losses came from uncertainty around what U.S. President Donald Trump’s tenure will mean for Canada when it comes to the North American Free Trade Agreement, he said.
Trump has threatened to shake-up the NAFTA agreement as part of his protectionist policies or even abandon it altogether.
“What the market is waiting for is what’s next now,” said Adatia, pointing to Trump’s tax-cut and spending promises.
He expects the markets to perform well overall this year but with definite volatility as they react to any good news or uncertainty created by Trump’s policies.
It’s likely Canadian markets will be more volatile than those south of the border, he said.
In New York, major markets stayed relatively flat.
The Dow Jones industrial average lost 7.13 points to 20,093.78 and the S&P 500 lost a meagre 1.99 points to 2,294.69.
The Nasdaq composite, meanwhile, rose 5.60 points to 5,660.78. Despite the small increase, it was still an all-time high for the index since reaching a record close of 5,656.34 two days prior.
The Canadian dollar fell 0.23 of a U.S. cent to US76.12¢.
The February gold contract shed $1.40 to US$1,188.40 an ounce.
The price of the precious commodity is likely to move up and down this year based on Trump’s comments on Twitter, according to Adatia.
“Every time he tweets, gold should go up,” he said, and vice versa for every time the brash billionaire stays quiet on the social media platform.
Elsewhere in commodities, the March natural gas contract dropped around US4¢ to about US$3.36 per mmBTU and March copper contracts rose nearly US2¢ to about US$2.69 a pound.