TSX drops as industrial shares slide, wraps up week higher
July 18 (Reuters) – Canada’s main stock index closed lower on Friday, dragged down by weakness in industrial stocks, as investors reacted to trade uncertainty following a report that U.S. President Donald Trump was eyeing new tariffs on European Union products.
Toronto Stock Exchange’s S&P/TSX composite index closed down 72.92 points, or 0.27%, at 27,314.01.
For the week the index closed 1.1% higher, after hitting record highs on Thursday.
An FT report, which said the Trump administration was eyeing a tariff rate topping 10% even if a wider trade deal with Europe is struck, also sent U.S. indexes lower before they partly recovered.
“It’s definitely a risk-off environment,” said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James.
“We’ve had such a great run up this week on TSX, along with the S&P and Nasdaq… you were going to get a breather on a Friday afternoon,” Dehal said.
Industrial shares fell 1%, with Canadian Pacific Kansas City dropping 3.6%, the most on the index.
Air Canada and Canadian National Railway dropped over 2.4% each.
Healthcare stocks fell 1.5% and consumer discretionary stocks declined 1%.
On the flip side, utility stocks rose, boosted by Capital Power and TransAlta Corp shares adding 2.3% and 1.9%, respectively.
Energy stocks climbed 0.1%, with Headwater Exploration and Baytex Energy rising about 3.8% each.
Looking ahead, investors will assess the Bank of Canada’s Business Outlook Survey, set for release on Monday, for business expectations amid tariff-related uncertainty.
RBC analysts expect early stabilization in businesses’ expectations for future sales, input prices and hiring in the second quarter, with Canada’s duty-free exemption for trade compliant under the USMCA treaty.
“Better than feared growth and higher than wanted inflation topped with the prospect of significant fiscal stimulus spending in the year ahead — leaves a high bar for the BoC to make additional interest rate cuts this year,” RBC analysts said in a note. (Reporting by Twesha Dikshit and Nivedita Balu; Editing by Shreya Biswas, Sahal Muhammed and Nia Williams)
