Canadian Stocks Slide Amid Uncertainty Over CUSMA Talks, U.S.-Iran Weekend Attacks

(RTTNews) - Partially shedding two sessions of gains, Canadian stocks edged lower on Monday as investors anxiously watched the ongoing Canada-U.S. talks over review of the Canada-United States-Mexico Agreement while weekend U.S.-Iran strikes renewed escalation concerns.

After opening higher than the previous week's close, today the benchmark S&P/TSX Composite Index lost momentum early in the session and traded firmly negative throughout the rest of the day before settling at 34,823.82, down by 156.18 points (or 0.45%).

Only two of the 11 sectors posted gains today, with the healthcare sector leading among the two.

Nearly 18 months after U.S. President Donald Trump imposed whopping tariffs on Canadian exports to the U.S., the CUSMA free-trade pact officially comes up for a mandatory review on July 1.

Either the deal could be extended for another 16 years or could continue for 10 years with annual reviews or else be replaced with an entirely new framework.

Investors, business houses, and labor groups in Canada are awaiting to hear a breakthrough news from the development in the Canada-U.S. talks.

Canada and Mexico want to continue the high-stakes deal for 16 years.

Though Canadian negotiators have made it clear that July 1 is not a hard deadline, anxiety lingers in Canada as Trump indicated his disinterest in renewing the deal and has observed occasionally that the deal is no longer needed for the U.S. However, he allowed the negotiations to continue.

Last week, in its summer economic outlook report, Deloitte cited that this trade uncertainty is the biggest issue facing the Canadian economy.

Most Canadian goods now exported to the U.S. are tariff-free as they are passed under CUSMA route. According to Deloitte, losing tariff-free access to the U.S. could affect the Canadian economy substantially.

Last week, Canada's Prime Minister Mark Carney stated that Canada will work with its counterparts on the trilateral trade deal but asserted that he will not settle for a bad deal.

On the economic front, there were no significant data releases scheduled for today.

On the geopolitical front, the U.S. and Iran traded attacks over the weekend despite signing a Memorandum of Understanding on June 17 to extend an earlier-agreed ceasefire.

Last Thursday, a Singapore-flagged vessel passing through the Strait of Hormuz was hit by an unknown projectile.

Trump called the attack a foolish violation of ceasefire. Later, U.S. Central Command announced carrying out military attacks on Iran. Islamic Revolutionary Guards Corps of Iran retaliated promptly.

Again, on Saturday, a Panama-flagged vessel came under the attack by an unidentified projectile. Trump warned Iran to comply with U.S. expectations failing which he stated that Iran may not exist. The U.S. military intensified its attacks on Iran, while the IRGC targeted U.S. bases in the Arabian neighborhood.

These exchange of attacks renewed escalation concerns in the Middle East compelling investors to refrain from risky assets.

While Trump announced that Iran had requested talks with the U.S. which were scheduled in Doha, Qatar for tomorrow, Iran is yet to acknowledge officially.

Citing a U.S. official, media reports stated that both sides have agreed to stand down and continue their talks tomorrow while ships can move freely around the Strait of Hormuz.

Investors are awaiting April's numbers on Gross Domestic Product and S&P Global's June manufacturers activity survey from Canada in addition to the June month's non-farm payrolls report and factory activity survey from the U.S.

Major sectors that gained in today's trading were Healthcare (0.55%) and Financials (0.33%).

Among the individual stocks, Curaleaf Holdings Inc (2.12%), Bausch Health Companies Inc (1.77%), Trisura Group Ltd (3.31%), EQB Inc (2.38%), and Manulife Fin (1.08%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (0.65%), Consumer Discretionary (1.03%), Materials (1.06%), Communication Services (1.38%), and Consumer Staples (1.66%).

Among the individual stocks, AltaGas Ltd (2.10%), Aritzia Inc (2.90%), Aya Gold and Silver Inc (5.37%), Novagold Res Inc (4.46%), and Empire Company Limited (2.40%) were the notable losers.

Blackberry Limited (9.98%), 5N Plus Inc (7.12%), and Mda Space Ltd (6.99%) were among the prime market-moving stocks today.