Canadian stocks edged lower on Wednesday, extending the losses from yesterday's session, as a peace deal between the U.S. and Iran to end the gulf war remains elusive, compelling investors to hold back from risky moves.
After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded negative throughout the session before settling at 34,412.05, down by 241.82 points (or 0.70%).
Four of the 11 sectors posted gains today, with the consumer staples sector leading the pack.
As the U.S. versus Iran war entered day number 89 today, the Strait of Hormuz, which was shut immediately by Iran after the war began, continues to remain closed.
Over the past three months, the blockade has crippled oil and energy transit across the strait from Arab nations to the rest of the world, catapulting oil prices sharply.
Today, Iran's state TV broadcast that it had a draft unofficial framework for a Memorandum of Understanding with the U.S.
The report added that if signed by both the nations, Iran would then restore normal commercial shipping across the strait over a period of 30 days by clearing the sea mines, and in addition, the ship traffic would be managed by Iran with Oman's cooperation.
On its part, the U.S. would withdraw its forces from Iran's neighborhood as well as lift the naval blockade it has enforced on Iranian ports.
It further stated that if a final deal is reached in 60 days, it could be endorsed as a binding U.N. Security Council resolution.
Contrasting these claims, the White House called the report false and the draft MoU a completely fabrication.
In a short telephonic interview with PBS News, U.S. President Donald Trump stated that Iran would not get relief from the U.S. sanctions in exchange for giving up its highly enriched uranium.
At White House, Trump added that Iran wants a deal but the U.S. is not satisfied by Iran's offers but expressed optimism on Iran coming up with a good deal. Trump reiterated that the Strait of Hormuz must be open for everybody.
On Monday, U.S. forces near Iran carried out strikes on boats that allegedly attempted to lay sea mines across the Strait of Hormuz.
The strikes also targeted missile-launching sites near the port city of Bandar Abbas in southern Iran.
Besides these Middle East issues, Canadian investors are also concerned about the negotiations with the U.S., ahead of the upcoming renewal of Canada-United States-Mexico Agreement for free trade.
The Trump administration has kicked off the first of three negotiating rounds with Mexico with no mention of Canada.
Yesterday, U.S. Trade Representative Jamieson Greer stated that the U.S. has significant trade issues with Canada. He also stressed that as long as the U.S. has a giant trade deficit, it will impose tariffs even on countries in its own hemisphere.
Greer added that issues with Canada travel past trade "irritants" and hence it is difficult to predict a resolution.
Economists are concerned of the structure of the talks that left out Canada in the opening round of discussions as they view that decisions made during U.S.-Mexico discussions could affect Canadian industries.
On the economic front, it was an unremarkable day for Canadian market with no important data releases.
Major sectors that lost in today's trading were IT (0.88%), Healthcare (1.64%), Materials (2.20%), and Energy (2.36%).
Among the individual stocks, Coveo Solutions Inc (4.12%), Celestica Inc (3.58%), Curaleaf Holdings Inc (3.52%), Enerflex Ltd (6.18%), Terravest Industries Inc (4.57%), G Mining Ventures Corp (7.12%), and K92 Mining Inc (6.17%) were the notable losers.
Major sectors that gained in today's trading were Consumer Staples (1.28%), Communication Services (0.67%), Industrials (0.64%), and Real Estate (0.37%).
Among the individual stocks, Alimentation Couche-Tard Inc (1.93%), Rogers Communications Inc (2.06%), Cae Inc (3.99%), Mda Space Ltd (3.69%), and Air Canada (3.34%) were the prominent gainers.
Goeasy Ltd (6.42%), West Fraser Timber CO Ltd (4.39%), and Exchange Income Corporation (4.25%) were among the prime market-moving stocks today.
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