S&P/TSX composite falls after intraday record to close fourth straight month of gains

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TORONTO — Canada's main stock index closed out a fourth-straight month of gains despite losing some ground in the final day of May.

The S&P/TSX composite index fell 121.19 points to 19,730.99 despite reaching an intraday record of 19,909.58.

U.S. stock markets are closed for the Memorial Day holiday.

The Toronto market climbed 3.3 per cent in May and is up 13.2 per cent year-to-date.

The monthly gain was pretty broad-based with materials up about eight per cent, and consumer staples, financials and energy each up about 4.5 per cent. In fact, eight of the 11 major sectors were higher.

"So pretty solid month," said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.

"It's the kind of trend from last year of the market continuing to grind higher. It looks like it's the case notwithstanding the fact we're obviously down a little bit here today."

Earnings have been strong and investors have lots of cash, which is helpful for broader markets, he said in an interview.

Canadian banks, in particular, unveiled solid quarterly results, prompting some profit-taking on Monday.

The materials group has bounced back largely on the move in the price of gold. The sector lost ground on the day even though gold prices climbed to its highest level since January, in part, because of weakness in the U.S. dollar.

"So that certainly helps the commodities space and gold in particular. And obviously as you get further into the summer season, it usually becomes a little bit more volatile and some people are hedging and buying a little bit of protection with respect to the gold names."

The August gold contract was up US$4.20 at US$1,909.50 an ounce and the July copper contract was down less than a penny at US$4.67 a pound.

Health care, consumer discretionary and consumer staples were the biggest laggards on the day.

The cannabis sector dropped 1.4 per cent as shares of the Cronos Group Inc. fell 5.2 per cent and those of Organigram Holdings Inc. were 3.9 per cent lower. However, Tilray Inc. was up 1.6 per cent on its first day of trading on the Canadian exchange.

Financials decreased as some of the banks that posted strong results last week dipped with CIBC, Royal Bank and Bank of Montreal down 1.2, 1.2 and 0.5 per cent, respectively.

Bank of Nova Scotia will report its results Tuesday to wind up bank quarterly results.

Technology was soft as shares of Shopify Inc. were 1.5 per cent lower. The sector's decrease was despite an 17.7 per cent increase by Dye & Durham Ltd. after the cloud-based software and technology company said it has received an indication of interest from a shareholder group led by management to take the company private.

Energy and real estate were the lone sectors to end the day in positive territory.

Energy increased 1.5 per cent as oil prices hit their highest level in about two years, pushing shares of Whitecap Resources Inc. up 6.6 per cent.

The Canadian dollar traded for 82.84 cents US compared with 82.74 cents US on Friday.

Prices rose a day before OPEC and Russia meet, where the cartel is expected to gradually increase supply.

The July crude oil contract was up 59 cents at US$66.91 per barrel and the July natural gas contract was up 5.5 cents at US$3.04 per mmBTU.

Crude prices rose amid waning concerns about Iranian oil returning to the global market with a nuclear agreement.

"I think it's really just an issue that demand continues to come back quicker than the market had expected," he said.

"If we look back to what we expected at the start of the year, the demand trajectory globally is continuing to pick up, mobility is continuing to improve in many parts of the world and so to the extent that that continues to happen, you're likely going to see probably this nice balancing act of continuing to bring back barrels to the market but not doing it overly aggressively."

This report by The Canadian Press was first published May 31, 2021.


Ross Marowits, The Canadian Press

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