Canadian stock markets closed mostly flat on Wednesday, on the back of growing concerns about the global economy, hindering investor appetite.
The S&P/TSX Composite Index closed down 0.1% at 16,132.5 points, pushed down by healthcare stocks, especially cannabis stocks, including Cronos Group Inc (NASDAQ:CRON) (TSE:CRON), which dropped 8.5% to C$24.75 in Toronto and was off 9.9% at US$18.24 in New York.
Shares of Aurora Cannabis Inc (NYSE:ACB) also moved the dial, down 3.6% at US$8.83 in New York and declining 3.3% at C$11.83 in Toronto.
The TSX Venture Exchange dropped 1.3% to 626.3 points.
The Canadian Securities Exchange closed up 0.7% at 881.43 points, led by Sproutly Canada Inc (CSE:SPR), which was up 12% to C$0.06. The company is a supplier to the cannabis beverage and edibles market.
In the US, the Dow Jones Industrial Average lost 0.1% to 25,625.6, while Nasdaq dropped 0.6% to 7,643.4 and the S&P 500 shrank 0.5% to 2,805.4.
The Russell 2000 small-cap index fell 0.4% to 1,522.2.
In Europe, the FTSE ended nearly flat at 7,194.2 in London just before Prime Minister Thresa May announced she would resign if her Brexit deal is passed.
The French CAC ticked up 0.1% to end the day at 5,314.7, and the German DAX finished almost exactly flat at 11,419.
1:30 pm: Canada stocks go into reverse by mid-session as traders took risk off the table
The S&P/TSX Composite Index slipped 0.2% to 16,131.5 in late-afternoon trading, while the Venture Composite Index was also in the red, down nearly 8 points at 626.9. The Canadian Securities Exchange slipped by 13 points at 862.4.
The Canadian dollar was down 0.2% against the US dollar as Statistics Canada reported that average weekly earnings were $1,012 in January, which was little changed from the previous month.
The big gainer on the TSX was Largo Resources Ltd (TSE:LGO), which climbed nearly 7% to C$2.33 as it reported its strongest year of earnings and production since it began operations.
Cronos Group Inc (TSE:CRON) was the big laggard, falling 9.9% to $24.36 after broker Canaccord Genuity downgraded the cannabis company's stock to Sell.
Global markets
FTSE 100 ended the day on a damp squib, near flat at 7,194, as news emerged shortly afterwards that UK PM Theresa May will resign after her Brexit deal is passed.
Mrs May reportedly told MPs that she will resign before the next phase of the Brexit negotiations, though no exact date was set.
The UK blue-chip index closed down around two points at 7.194.
On Wall Street, the Dow Jones Industrial Average is down around 60 points and the S&P 500 shed nearly 12. German and French benchmarks were also lower
10.30am Stable oil prices, Canadian dollar guide Canadian markets to mid-week gains
Canadian markets opened slightly higher on Wednesday as trade data showed a narrowing deficit in January 2019 thanks to stable oil prices.
However, the deficit of C$4.3 billion is still close to December 2018’s record high gap of C$4.8 billion, signaling a less-rosy forecast for Canadian trade, according to new data from Statistics Canada.
The TSX opened at 16,165 on Wednesday before leveling off at 16,155 by mid-morning. The TSX Venture fell from an opening high of 634 to about 632 during the first hour of trading.
The Canadian Securities Exchange also fell from its opening high of 880 to 870 points on Wednesday morning.
Largo Resources Ltd (TSE:LGO) (OTCMKTS:LGORF) was the biggest early percentage gainer, up almost 14% to C$2.48 after it reported its strongest year of earnings and production in the company’s history.
Other big gainers were Guyana Goldfields (TSE:GUY) (OTCMKTS:GUYFF), up 6% to $1.40 and Trilogy International Partners Inc (TSE:TRL) (OTCMKTS:TLLYF), which moved 3% in positive territory to $2.24.
Cronos Group Inc (TSE:CRON) (NASDAQ:CRON) shares continued to decline on disappointing earnings this week, down over 8% to $24.89 after a round of analyst downgrades.
Commodity prices were mixed early Wednesday. Oil stayed just above the US$60 mark to trade at US$60.06, an increase of 0.2%, while gold was down a slight 0.2% to US$1,312.80.
The Canadian dollar was steady at US$0.75.
Global markets
US stocks are on course to fall at the New York bell after a mixed session in Asia and as European indices are also seeing red.
Wall Street was buoyed on Tuesday as traders were optimistic on China/US trade talks this week and there was less anxiety over the bond market.
The Dow Jones Industrial Average finished ahead by around 140 points at 25,657, while the Nasdaq added nearly 54 points. The S&P 500 gained around 20 to stand at 2,818.
Meanwhile, in corporate America, plane maker Boeing Co (NYSE:BA), along with the wider airline sector will be in focus later on Wednesday as top federal aviation officials will appear in Congress to answer questions on aircraft safety.
Brexit continues to dominate in Europe, as Parliament bids to take control of the process from the government. The FTSE 100 is down around 29 points at 7,167, the German DAX is also off around 29 at 11,391.
In Asia, shares were mixed. The Nikkei 225 in Japan finished down around 49 and the Shanghai Composite Index gained 25 points at 3,022.
Giles Gwinett also contributed to this report
Contact Angela at angela@proactiveinvestors.com
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