Canadian stocks turned negative on Thursday as falling crude oil prices, the ongoing U.S. government shutdown, and concerns about lending practices at some U.S. regional banks weighed on investor sentiment, snapping the TSX’s two-day winning streak. After rallying by 2.6% in the last couple of sessions combined, the S&P/TSX Composite Index gave up nearly 178 points, or 0.6%, to settle at 30,459.
Losses were mainly led by the energy and financial sectors, as crude oil extended its decline and banking stocks reacted to renewed credit quality concerns in the U.S. On the brighter side, firm precious metals prices continued to drive metals and mining stocks higher.
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Capstone Copper (TSX:CS) plunged 10.3% to $11.50 per share, making it one of the worst-performing TSX stocks for the day. This selloff in CS stock came after Orion Mine Finance Management disclosed the sale of 47.5 million Capstone shares in a private transaction worth over $577 million.
This significant divestment cut Orion’s stake in Capstone Copper by nearly half — from 11.8% to 5.6% of outstanding shares — sparking investor concerns about reduced institutional backing. Although Orion recently agreed to subscribe to a smaller US$10 million equity investment in Capstone, the timing and scale of the latest share sale apparently overshadowed that move, prompting a sharp market reaction. On a year-to-date basis, CS stock is still up 29.4%.
Energy Fuels, Ero Copper, and Curaleaf were also among the bottom performers on the Toronto Stock Exchange, with each falling by at least 5.6%.
In contrast, shares of NGEx Minerals (TSX:NGEX) jumped over 8% to $27.73 per share after the Vancouver-based firm announced the expected closing date of its highly anticipated spin-out transaction. The company confirmed that it will spin out its royalty interests in the Lunahuasi and Los Helados projects into a new entity, LunR Royalties, effective October 23.
Canada Packers, TFI International, and Endeavour Silver also climbed by at least 6.7%, making them among the day’s top-performing TSX stocks.
Based on their daily trade volume, Capstone Copper, Cenovus Energy, NexGen Energy, B2Gold, and TD Bank were the five most active stocks on the exchange.
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Crude oil and copper prices fell sharply in early morning trading on Friday, but spot gold continued to trade close to its record highs after settling well above US$4,300 per ounce in the previous session. Given these mixed signals in the commodity markets, the main TSX index may open slightly lower on Friday, with pressure likely to persist in the energy sector.
While no major economic releases are due this morning, Canadian investors may remain cautious as global trade and macroeconomic uncertainties continue to cloud the near-term outlook ahead of the upcoming corporate earnings season.
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