Energy, pot stocks weigh on Toronto market, while loonie climbs higher | iNFOnews | Thompson-Okanagan's News Source

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Energy, pot stocks weigh on Toronto market, while loonie climbs higher

The Toronto Stock Exchange Broadcast Centre is shown in Toronto on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim
July 16, 2018 - 2:05 PM

Canada's main stock index closed in the red as a drop in crude prices pushed energy stocks lower, while U.S. stocks were mixed.

The August crude contract fell $2.95 or 4.15 per cent to close at US$68.06 after U.S. officials toned down threats against countries and businesses who buy Iranian oil.

Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo said those who import Iranian oil after sanctions return in November could avoid penalties if they reduce those imports significantly, rather than cut off the trade entirely.

The potential for more flexibility, as well as increasing production from other countries to make up for restrictions on Iran, helped push prices lower, said Allan Small, a senior investment adviser at HollisWealth.

"Overall, it's based on the fact that a bunch of countries are picking up the slack for Iran, obviously with the President of the U.S. trying to get people not to buy their exports."

Small said other countries have enough capacity to make up for shortfalls due to the sanctions.

"There's always a lot more oil sloshing around than necessary, it's just a bunch of these countries were just holding back."

The drop in oil prices helped push the S&P TSX capped energy index down 2.16 per cent on the day to see it behind only the cannabis-heavy health care index for losses.

Overall, the S&P/TSX composite index closed down 66.39 points at 16,494.73 as financials, telecoms, and consumer staples helped offset losses in commodities.

In New York, the Dow Jones industrial average ended up 44.95 points at 25,064.36. The S&P 500 index closed down 2.88 points at 2,798.43 and the Nasdaq composite index was down 20.26 points at 7,805.72.

Markets were somewhat risk-off after U.S. President Donald Trump's controversial comments following a meeting with Russian President Vladimir Putin, but overall the reaction was muted, said Small.

The Canadian dollar averaged 76.12 cents US, up 0.20 of a US cent.

The August gold contract ended down $1.50 at US$1,239.70 an ounce and the September copper contract was down two cents at US$2.76 a pound. The August natural gas contract ended up one cent at US$2.76 per mmBTU.

Marijuana companies were down sharply as concerns increase about a potential added federal tax to the product. Aurora Cannabis Inc. closed down 6.5 per cent, Canopy Growth Corp. was down 4.02 per cent, the Hydropothecary Corp. down 8.58 per cent, and Aphria Inc. down 7.23 per cent.

Companies in this story: (TSX:WEED), (TSX:ACB), (TSX:HEXO), (TSX:APH)

News from © The Canadian Press, 2018
The Canadian Press

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