TSX down 0.58% as seven sectors decline
Canadian banks to set aside C$5.22 billion in loan-loss provisions
NovaGold and Energy Fuels Inc gain amid sector declines
(Updates with closing price)
Aug 25 (Reuters) – Canada’s main stock index closed in the negative on Monday as investors get ready for a week of earnings from top domestic lenders. Despite U.S. Federal Reserve Chair Jerome Powell’s hints about interest rate cuts propelling the market to new heights in the previous session, investors remained cautious. At the end of Monday’s trading, the Toronto Stock Exchange’s S&P/TSX composite index closed down 0.58% at 28,169.94 points. Of the 10 sectors, seven closed in the red, the healthcare index fell the most with a 2.22% decline, followed by industrials. The Canadian banks will kick off earnings season on Tuesday, beginning with Bank of Montreal and Bank of Nova Scotia . Canada’s big six banks are expected to set aside a total of C$5.22 billion in loan-loss provisions for the third quarter, compared to C$6.37 billion in the second quarter, according to data compiled by LSEG.
Most resources and energy stocks fared well, with NovaGold and Energy Fuels Inc gaining 5.6% and 3.55% respectively. Big banks are expected to have cut third-quarter loan-loss provisions from the prior quarter, according to data compiled by LSEG, as the hit from U.S. tariffs on loan portfolios appears less than feared. Chipmaker Nvidia’s results on Wednesday will attract global attention as it could determine the future of the tech-driven rally.
The Personal Consumption Expenditures Price index – the Fed’s preferred inflation gauge – is due on Friday, and will be a key indicator for expectations around rate cuts. In Canada, second-quarter GDP numbers on Friday will be watched to evaluate the impact of tariffs on the economy. (Reporting by Nikhil Sharma and Divya Rajagopal in Toronto; Editing by Sahal Muhammed and Lisa Shumaker)
