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Canadian Shares Exhibiting Weakness As Growth Concerns, Weak Results Hurt Sentiment

The Canadian stock market is languishing deep down in negative territory Friday noon, after opening marginally lower despite data showing a modest surge in Gross Domestic Product in the month of May, and higher crude oil and gold prices.

Rising worries about spikes in coronavirus cases across the globe, fears of lockdown measures, and some weak earnings results are weighing on sentiment.

Consumer discretionary, financial, energy and information technology shares are among the prominent losers. Several stocks from consumer staples, real estate and industrial sections are also down sharply, while material stocks are higher. Healthcare stocks are turning in a mixed performance.

The benchmark S&P/TSX Composite Index, which tumbled to 16,077.74, is down 211.21 points or 1.3% at 16,088.08 a few minutes past noon.

Consumer discretionary shares Magna International (MG.TO), Brp Inc. (DOO.TO), Linamar Corporation (LNR.TO) and Gildan Activewear (GIL.TO) are down 3.5 to 4%. Martinrea International (MRE.TO), Canada Goose Holdings (GOOS.TO), Restaurant Brands International (QSR.TO) and Great Gaming Corporation (GC.TO) are also down sharply.

In the financial section, Bank of Montreal (BMO.TO), CDN Western Bank (CWB.TO), Laurentian Bank (LB.TO), Manulife Financial (MFC.TO), National Bank of Canada (NA.TO), Bank of Nova Scotia (BNS.TO), Toronto-Dominion Bank (TD.TO) and Sun Life Financial (SLF.TO) are down 1 to 3%.

Among information technology stocks, Sierra Wireless (SW.TO) is declining 3.2%, Lightspeed Pos (LSPD.TO) is down 2.7% and Celestica Inc. (CLS.TO) is lower by 2%. Constellation Software (CSU.TO), CGI Group (GIB.A.TO), Open Text Corporation (OTEX.TO), Shopify Inc. (SHOP.TO) and BlackBerry (BB.TO) are lower by 1 to 1.7%.

In the energy space, Imperial Oil (IMO.TO) is declining 3.4%. Husky Energy (HSE.TO) and Suncor Energy (SU.TO) are both lower by 3%. Vermilion Energy (VET.TO), MEG Energy (MEG.TO) and Cenovus Energy (CVE.TO) are down 2.4 to 2.8%, while Canadian Natural Resources (CNQ.TO) and PrairieSky Royalty (PSK.TO) are down 1.7% and 1.4%, respectively.

Materials shares Kinross Gold Corp (K.TO), Kirkland Lake Gold (KL.TO), Pan American Silver (PAAS.TO), Alacer Gold (ASR.TO), Eldorado Gold (ELD.TO), Ssr Mining (SSRM.TO), Semafo (SMF.TO), Iamgold Corp (IMG.TO), MAG Silver Corp (MAG.TO), B2Gold Corp (BTO.TO) and Agnico Eagle Mines (AEM.TO) are gaining 3 to 7%.

TransAlta Corporation (TA.TO) said net loss attributable to common shareholders for the three months ended June 30, 2020, was $60 million compared to nil in the same period in the prior year. Net loss attributable to common shareholders for the six months ended June 30, 2020, was $33 million, compared to a loss of $65 million in the same period in 2019. The stock is down by about 0.7% at noon.

SNC-Lavalin Group Inc. (SNC.TO) shares are plunging more than 8% after the company reported a net loss of $111.6 million or 64 cents for the second-quarter of this financial year, compared with a net loss of $2,118.3 million or $12.07 per share in the second-quarter of 2019.

Air Canada (AC.TO) is down nearly 5%. The company reported a net loss of $1.752 billion or $6.44 per diluted share in the second quarter of this financial year, compared to net income of $343 million or $1.26 per diluted share in the second quarter of 2019.

Data released by Statistics Canada this morning showed the Canadian economy grew 4.5% over a month earlier in May 2020, recovering from a record 11.6% contraction in April and compared with market expectations of a 3.5% expansion.

Another data showed Industrial product prices in Canada rose 0.4% in June, after rising 1.2% in May. Raw materials prices were up 7.5% in May, after rising 16.4% a month earlier.

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