TSX Ends Sharply Lower On Trade War Jitters

(RTTNews) - Canadian shares plunged sharply on Friday due to an escalation in U.S.-China trade tensions after China announced additional tariffs on U.S. products and U.S. President Donald Trump responded with a strong message.

The market recovered after a weak start, only to falter and slip deeper into the red as the session progressed to eventually finish with sharp losses.

The benchmark S&P/TSX Composite Index ended down 215.88 points, or 1.33%, at 16,037.58, after falling to a low of 16,003.07. The index shed 0.68% in the week.

Only shares from the materials space managed to buck the trend, thanks to a sharp jump in gold prices.

Energy, industrial, financial and information technology stocks tumbled. Healthcare and consumer discretionary shares too closed sharply lower.

The Capped Energy Index shed as much as 3.15%. The Industrials and Information Technology indices declined 2.3% and 2.17%, respectively.

The Capped Healthcare Index lost nearly 2% and the Consumer Discretionary Index declined 1.86%, while the Capped Financial Index ended 1.5% down.

Bombardier Inc. (BBD.B.TO), MEG Energy (MEG.TO), Encana Corporation (ECA.TO), Crescent Point Energy (CPG.TO), Aurora Cannabis (ACB.TO) and Enbridge Inc. (ENB.TO) were some of the stocks that went down sharply on huge volumes. These stocks lost between 2.5 to 8.2% in the session.

Canada Goose Holdings (GOOS.TO), BRP Inc. (DOO.TO), Constellation Software (CSU.TO), Manga International (MG.TO), Canadian Pacific Railway (CP.TO), Canadian National Railway (CNR.TO) and Thomson Reuters (TRI.TO) ended lower by 2 to 7%.

Among the gainers today, Cargojet soared nearly 13% after the company said it has signed a new deal with Amazon.com that could result in the latter acquiring a stake in the airliner. Cargojet expects the agreement to generate additional revenue growth and be meaningfully accretive to Cargojet's earnings and cash flows over time.

Franco-Nevada Corporation (FNV.TO), Agnico Eagle Mines (AEM.TO), Kirkland Lake Gold (KL.TO), Wheaton Precious Metals (WPM.TO), SSR Mining (SSRM.TO), Seabridge Gold (SEA.TO), Torex Gold Resources (TXG.TO), Newmont Goldcorp (NGT.TO) and Pan American Silver Corp (PAAS.TO) gained 2 to 7%.

On the economic front, retail sales in Canada were unchanged in June 2019, following an upwardly revised 0.2% fall in the previous month and slightly above market forecasts of a 0.1% decline. Year-on-year, retail sales were up 1% in June 2019.

Retail sales ex-autos increased to 0.9% year-on-year in June 2019, rebounding from an upwardly revised 0.4% fall in the previous month.

The U.S. and European markets tumbled due to an escalation in trade tensions after China announced tariff hikes on $75 billion of U.S. products and said that import duties on U.S.-made autos and auto parts will also be increased.

U.S. President Trump claimed the U.S. does not need China and would be "far better off without them" and subsequently ordered American companies to "immediately start looking for an alternative to China."

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted.

Before the sell-off, the markets had showed a bit of strength after the Fed chief Jerome Powell reiterated during his speech at the Jackson Hole Economic Policy Symposium that the central bank will "act as appropriate" to support economic expansion.

In commodities, West Texas Intermediate Crude oil futures for October ended down $1.18, or about 2.1%, at $54.17 a barrel.

Gold futures for December ended up $29.10, or 1.9%, at $1,537.60 an ounce, the highest settlement since April 2013.

Silver futures for September ended up $0.373, at $17.413 an ounce, while Copper futures for September settled at $2.5300 per pound, down $0.0275 from previous close.