TORONTO – Canada’s main stock index closed at its lowest level in nearly four weeks as its major sectors came under pressure ahead of Monday’s federal election.

A confluence of factors has affected markets on both sides of the border, including bad economic news from China, increasing COVID cases, uncertainty over the US infrastructure plan and some uneasiness ahead. the next election, said Kevin Headland, senior investment strategist at Manulife Investment Management.

With another minority government expected in Ottawa, Liberal and Conservative tax plans are uncertain.

“Usually, the results of elections in Canada don’t really have an effect on the wider market,” Headland said in an interview, “but what we saw before the previous election is a sense of unease, and markets don’t I don’t like uncertainty.

“Just considering that (it’s) the Friday before Monday’s election, there might be a bit of profit taking there.”

The S & P / TSX Composite Index closed 111.74 points lower at 20,490.36, its lowest level since August 23.

In New York, the Dow Jones Industrial Average was down 166.44 points to 34,584.88. The S&P 500 Index lost 40.76 points to 4,432.99, while the Nasdaq composite lost 137.95 points to 15,043.97.

One thing in common between the moves in the US and Canadian markets is the timing, with September being the worst month of the year, he said.

Even Thursday’s positive US retail sales figures have been viewed through the lens of what this might mean for the Federal Reserve’s decision to gradually cut stimulus.

Investors are eagerly awaiting the central bank’s decision on interest rates and its guidance on its next steps on Wednesday.

While the market does not like the idea of ​​’pulling the bowl of punch’ with reduced stimulus, the last time this was done in 2013 and 2014 was actually positive for the markets, Headland said. .

“Even positive news cannot be considered negative by this market at this time.”

Nine of the TSX’s top 11 sectors were down on Friday, led by energy, consumer staples, financials and materials.

Energy fell nearly two percent due to the drop in the price of crude oil.

The November crude contract was down 55 cents to US $ 71.82 per barrel and the October natural gas contract was down 23 cents to US $ 5.11 per mmBTU.

The shares of Canadian Natural Resources Ltd. fell 3%, followed by MEG Energy Corp. and Whitecap Resources Inc., 2.8% and 2.6% respectively.

Headland said coal appeared to be one of the main weakening factors in the energy sector.

The Canadian dollar was trading at 78.61 US cents against 78.90 US cents on Thursday.

Headland expects the loonie to appreciate to 80 cents or more with continued support from oil prices.

Even though gold and copper prices were lower, steel appeared to be a contributing factor with Labrador Iron Ore Royalty Corp. down 5.8 percent and Stelco Holdings Inc. down 4.8 percent after US Steel announced plans to build a new plant.

“You might expect that there will be less demand for Canadian steel if there is an increase in production of steel made in the United States,” he said.

The December gold contract was down US $ 5.30 to US $ 1,751.40 an ounce and the December copper contract was down 3.6 cents to nearly $ 4.25 US per pound.

Alimentation Couche-Tard Inc. led consumer staples down while the heavy truck financial sector was down 1% with Laurentian Bank down 2.3%, Manulife Financial 1.8% and the Royal Bank of Canada by 1.5%.

Only healthcare and industries were on the rise that day. Industrials soared as shareholders of the Canadian National Railway Company praised the company’s strategic plans after abandoning its efforts to acquire Kansas City Southern.

This report by The Canadian Press was first published on September 17, 2021.

Companies in this story: (TSX: CNQ, TSX: MEG, TSX: WCP, TSX: LB, TSX: MFC, TSX: RY, TSX: LIF, TSX: STLC, TSX: ATD.B, TSX: GSPTSE, TSX: CADUSD = X)