TSX falls as mining shares slump after Trump victory
Trump was elected after defeating Vice President Kamala Harris, marking a comeback four years after he was voted out of the White House.
Canada's main stock index saw a slight decline on Wednesday, with a significant drop in mining stocks affecting market sentiment following Donald Trump's return to the U.S. presidency. By mid-morning at 10:05 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index had fallen 42.52 points, or 0.17%, to 24,345.38.
Trump's win, in which he defeated Vice President Kamala Harris, sparked a worldwide stock market rally as investors considered the potential global economic impact of his second term. His proposed tariff hikes could notably affect Toronto's commodity-heavy market, particularly due to the United States’ role as Canada’s primary energy export destination.
The materials sector led the decline, dropping 2.9% as gold prices fell by over 5% against a strengthening U.S. dollar. Meanwhile, the information technology sector saw gains, up 1.5%, aided by Bitfarms' 11.4% rise, which followed a surge in crypto stocks post-election.
Financial stocks, representing the largest sector on the index, gained 0.9%, with IA Financial rising 11.4% after exceeding profit expectations for the third quarter. Economist Douglas Porter noted, "A strong U.S. dollar has somewhat weighed on commodity prices," adding a "notable drag on Canadian markets."
In other economic developments, the Canada Ivey Purchasing Managers Index fell to 52.0 in October, down from 53.1 in September, while Greater Toronto Area home sales saw a notable month-on-month increase, marking the largest rise since December 2023.
Attention now turns to the U.S. Federal Reserve's policy announcement scheduled for Thursday, with expectations of a 0.25% interest-rate cut. Bank of Canada Senior Deputy Governor Carolyn Rogers is also set to speak later today, adding to the economic insights anticipated by investors.
