TORONTO — Canada’s main stock index was down on Thursday, weighed down by losses in the energy sector as the price of oil fell, while U.S. stock markets were also lower.
“We’re seeing a continued drift in markets, and the TSX included, after what was a very strong first quarter to the year,” said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management.
The S&P/TSX composite index was down 50.14 points at 20,630.69.
In New York, the Dow Jones industrial average was down 110.39 points at 33,786.62. The S&P 500 index was down 24.73 points at 4,129.79, while the Nasdaq composite was down 97.67 points at 12,059.56.
Burkett added there is concern around the ongoing strike of federal public servants that could have a ripple effect on the economy, especially discretionary consumer spending.
“Those responsible for managing portfolios are thinking more broadly, ‘what happens in our economy if it is the case that some of these essential government services are severely constrained for some period of time?’” he said.
“So there’s a lot of weighing of probabilities on length of the strike, economic impact of the strike.”
He said given the upcoming tax filing deadline of April 30, much of that concern “centres around the CRA at this moment.”
The Canadian dollar traded for 74.24 cents US compared with 74.38 cents US on Wednesday.
“Oil prices have remained persistently high on the expectation in particular around a reopening in China and elsewhere,” Burkett said.
“That combined with OPEC (production) cuts are continuing to keep energy prices elevated. At the same time, inflation data continues to show a moderation in some of the forces that drove interest rates higher in the previous year.”
The June crude contract was down US$1.87 at US$77.37 per barrel and the May natural gas contract was up three cents at US$2.25 per mmBTU.
Despite declines, Burkett said the price of oil remains within a “comfortable” range for the Canadian economy.
“Oil prices that are reasonably contained but elevated is, I think, a benefit to Canada in general,” said Burkett. “A strong oil price supports a stronger Canadian dollar.”
In other commodities, the June gold contract was up US$11.80 at US$2,019.10 an ounce and the May copper contract was down five cents at US$4.03 a pound.
This report by The Canadian Press was first published April 20, 2023.
Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)
