Canada’s main stock index slid over 1% on Tuesday and was at its weakest since late September with investors cashing in gains and bracing for the budget due shortly, amid a global risk-off mood.
At 9:50 a.m. ET, Toronto’s S&P/TSX composite index dropped 1.3% to 29,891.04 points – its lowest since September 26.
Canada’s Prime Minister Mark Carney is set to unveil his new budget that will roll-out a major stimulus to wean the country off its reliance on the U.S. – even as economists warn it could deliver the largest deficit since the pandemic.
The plan debuts a split between operating and capital outlays, targets an operating balance within three years, and projects debt-to-GDP on a downward track.
A report by the Global and Mail said Canada’s budget will include a C$50 billion ($35.65 billion) local infrastructure fund.
“Budgets in general have been very difficult to manage. We’re entering a new era of political uncertainty that just adds more volatility to the market,” said Jason Barsema, president of Halo Investing.
E-commerce company Shopify’s third-quarter profit took a hit from higher costs on the research and development of artificial intelligence features. Its shares edged up 0.3%.
Consumer staples was the only sector in the green.
“In Canada, volumes really started to pick up in defensive oriented products. What that tells you is people are willing to put capital to work. We see that as a good sign between Canada and US tensions,” Barsema added.
Despite a recent steady rally, sentiment remained fragile in Canada, where the downturn in the manufacturing sector showed signs of easing in October, though the PMI remained below the 50-mark, signaling continued contraction.
Weakness in commodity markets also added to the pressure, with copper miners dropping 2.7%, as prices of the red metal posted their biggest single-day drop in three weeks.
Among other share moves, Thomson Reuters reported higher third-quarter revenue, while reaffirming its full-year 2025 guidance. However, shares of the content and technology company fell 2.6%.
Energy Fuels plunged 14%, while Pet Valu Holdings dropped 12% after their third-quarter results.
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