TSX ebbs as Trump's Iran deadline nears
The main Canadian stock index fell on Tuesday, as investors monitored the situation in the Middle East after Iran did not show any signs of renouncing to the ultimatum of U.S. president Donald Trump to reopen Strait of Hormuz. At 10:55 am. The S&P/TSX composite index was down 0.1% to 33,149.58 at 10:55 a.m. ET.
As Trump's deadline drew nearer, the U.S. increased its strikes against Iran, targeting Kharg Island - home to Tehran's primary oil export terminal.
Trump gave Iran until 8 pm. ET (?3:30 am in Tehran) to end the blockade on Gulf oil or face massive destruction of Iran's?infrastructure. The?markets would likely react negatively at first if the U.S. invaded Iran, but they would then respond positively, thinking that this was closer to an end, said Allan Small. Senior investment advisor with Allan Small Financial Group, iA Private Wealth.
We are in limbo. "This state of affairs is not good for markets. Eight of the ten largest sectors on the TSX fell into negative territory as Middle East tensions escalated. Energy and utilities were the only sectors to remain in the green, as oil prices continued their gains.
Brent crude futures were hovering around $110, and U.S. West Texas Intermediate futures soared over $115, boosting the energy subindex by nearly 2%. Healthcare stocks led the way in losses, with a 1.8% drop. Consumer discretionary stocks also fell?more than 1 percent. The gold subindex and materials sector, which includes metal miners' stocks, fell 0.4%, while silver fell 3%.
Heavyweight financials also fell by 0.1%. Data showed that Canadian economic activity contracted for the first time in 4 months in March as inflation pressures grew. International Petroleum, a stock that is traded by individuals, grew 5.2% in March after BMO Capital Markets upgraded the company to "outperform", from "market perform".
(source: Reuters)
