The Canadian stock market fell sharply on Tuesday, as investors remained worried that the U.S. debt limit concerns might take longer to resolve than expected, despite ongoing talks. As a result, the S&P/TSX Composite Index tanked by 298 points, or 1.5%, yesterday to settle at 20,242, delivering its worst daily performance since mid-March.
With all key stock market sectors ending the day in red territory, energy, real estate, and metal mining fell the most, as debt concerns also kept haunting commodity investors.
After meeting congressional leaders, U.S. president Joe Biden said, “We’ve never defaulted on our debt, and we never will.” But his statement apparently failed to calm TSX investors because the outcome of the ongoing discussions still remains uncertain.
Top TSX Composite movers and active stocks
Shares of IAMGOLD (TSX:IMG) tanked 8.8% in the last session to below $4 per share after announcing a $400 million term loan financing from three institutional lenders. Notably, this development came a few days after the Toronto-based gold mining firm announced its better-than-expected first-quarter earnings, despite a decline in its quarterly gold sales on May 11. After the recent selloff, IMG stock is now up nearly 14% on a year-to-date basis.
Sharp intraday drop in the price of the yellow metal also took gold stocks like Seabridge Gold, Sandstorm Gold, Equinox Gold, and OceanaGold down by at least 5% each, making them the worst-performing TSX stocks for the day.
On the positive side, Converge Technology, Innergex Renewable Energy, and Fortuna Silver Mines stood out as top gainers on the Toronto Stock Exchange yesterday, as they rose 2.8% each.
Based on their daily trade volume, Enbridge, Suncor Energy, Manulife Financial, and Royal Bank of Canada were the most active stocks on the Canadian exchange.
TSX today
While prices of energy products and base metals were firm early Wednesday morning, precious metals were continuing to weaken further. Given these mixed signals from the commodities market, I expect the main TSX index to remain largely flat at the open today.
After the release of April’s cooler-than-expected Canadian consumer inflation data in the last session, you can expect renewed buying in tech stocks. However, investors may want to remain cautious, as the ongoing U.S. debt ceiling and budget negotiations may keep the market highly volatile.
Market movers on the TSX today
