U.S. Markets

TSX closes slightly lower on U.S. cannabis concerns, gold decline

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  • TSX ends down 15.48 points, or 0.07%, at 21,637.54
  • Cannabis firms fall on Barclays report, U.S. legalization doubts
  • Basic materials follow gold lower

Nov 18 (Reuters) - Canada's main stock index closed marginally lower on Thursday, as steep declines in cannabis stocks were offset by gains in industrials, technology and energy stocks.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended the day down 15.48 points, or 0.07%, at 21,637.54.

Cannabis producers Cronos Group (CRON.TO) and Tilray led declines, falling more than 12% after Barclays initiated coverage of both with "underperform" ratings. Other cannabis producers including Aurora Cannabis (ACB.TO), Organigram Holdings (OGI.TO) and Canopy Growth (WEED.TO) also slid after a Washington Post report that a U.S. federal legalization attempt could fail as lawmakers disagree on its details.

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That made healthcare the worst performing sector for the day, with a 6% decline. Technology and industrials had the biggest gains, of about 0.6%.

The Washington Post report "is causing some sell-off," said Greg Taylor, portfolio manager at Purpose Investments, although increases in technology names, including Shopify (SHOP.TO), one of the top 10 gainers, masked some of that.

"Gold is down today on some profit-taking," following recent gains as investors sought to hedge against soaring inflation, Taylor added.

The materials subindex (.GSPTTMT), which includes precious and base metals, miners and fertilizer companies, lost 0.9% as spot gold prices fell 0.4%.

Energy companies Cenovus Energy (CVE.TO) and Canadian Natural Resources (CNQ.TO) were among the 10 biggest gainers, climbing 2.7% and 1.8% respectively, following crude prices higher.

U.S. crude prices rose 0.4%.

Canadian stocks have added about 24% so far this year, broadly in line with the S&P 500 index (.SPX) on strong earnings and reopening optimism, but risks of interest rate hikes on soaring inflation have weighed on sentiment recently.

Insurer Definity Financial Corp (DFY.TO) jumped as much as 36% on its stock market debut after raising C$2.1 billion ($1.6 billion) in Canada's second-largest IPO. read more

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Reporting by Shashank Nayar in Bengaluru; Editing by Aditya Soni, Ramakrishnan M. and Jonathan Oatis

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