Canada’s main stock index fell by nearly 1% on Thursday as rising concern that Russia, one of the world’s top oil producers, would invade Ukraine weighed on investor sentiment.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 207.31 points, or 0.97%, at 21,176.33, its lowest closing level since Feb. 3.
Wall Street’s declines were even larger as U.S. President Joe Biden said there was every indication Russia was planning to invade Ukraine in the next few days and was preparing a pretext to justify it.
Investors worry that a conflict in Ukraine would disrupt energy supplies, raising inflation pressures still further.
“You could see prolonged inflation that now starts to disrupt some of the economic momentum,” said Philip Petursson, chief investment strategist at IG Wealth Management. “I don’t know if we’ll see things come to that level, but that’s what’s on the minds of traders today.”
Technology shares fell 4.2%, with Shopify Inc extending its recent slump to end 10.8% lower. Heavily-weighted financials closed down 1.6%.
One of the bright spots was the materials group, which includes precious and base metals miners and fertilizer companies. It added 2.3% as gold rallied.
“The TSX does have a nice safe-haven trade built into it with its weight to the gold miners,” Petursson said. “That’s providing some ballast for the TSX today.”
Also helping the index was retailer Canadian Tire Corp Ltd. Its shares rose 2.3% after the company beat estimates for quarterly profit and revenue.
The price of oil, one of Canada’s major exports, settled 2% lower at $91.76 a barrel as talks to resurrect a nuclear deal with Iran entered their final stages which could unlock more crude supplies.
Still, the energy group on the TSX rose 0.2%.
(Reporting by Fergal Smith; additional reporting by Amal S in Bengaluru; editing by Richard Pullin)
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