Canadian Stocks Pull Back Amid Profit-Taking From Recent Gains

(RTTNews) - Canadian stocks moved to the downside on Monday as investors resorted to booking profits from record highs from Friday while refraining from making big moves ahead of the upcoming monetary policy meeting by the U.S. Federal Reserve.

After opening below the previous week's close, the benchmark S&P/TSX Composite Index traded firmly negative throughout the session before closing at 31,101.78, down by 281 points (or 0.90%). Last Friday, the index settled at a new record closing high of 31,382.78.

Four of the 11 sectors posted gains today, with the healthcare sector leading the pack.

Reports from the U.S. suggest that Kevin Hassett (a rate-cut advocate) would be U.S. President Donald Trump's pick as the next Federal Reserve Chair.

With this, expectations of a rate cut by the Fed at its upcoming December 9-10 meeting have soared among investors though he would assume office only in mid-2026.

With a slew of bank earnings results slated for this week, traders opted for booking profits from last week's gains.

Last week, at an industry event organized in Calgary, Canadian Prime Minister Mark Carney stated that U.S. tariffs and the consequent uncertainty are set to wipe out $50 billion (roughly $1,300 for every Canadian) from the national economy.

Since the start of the tariff war, Carney has been exploring possibilities to reduce reliance on the U.S. for Canadian exports and has been stressing on the need to undertake massive projects to spur domestic growth.

Last Thursday, Carney entered into an agreement with Alberta Premier Danielle Smith to advance a new oil pipeline from Alberta to the Pacific coast of Canada to transport oil to Asia, thereby broadening exports.

Environmentalists criticized him for making a U-turn on Canada's fight against climate change.

In October, U.S. President Donald Trump halted all trade negotiations with Canada, displeased by an advertisement made in Ontario and aired in the U.S. that mocked his tariffs.

While sector-specific Canadian exports to the U.S. have been hit by 35% tariffs, a majority of them that fall under Canada-United States-Mexico Agreement (CUSMA) are still unaffected.

While public hearings are scheduled in Washington this week, ahead of the renewal process for CUSMA next July, reportedly many U.S. industries are urging the Trump administration to maintain and preserve the agreement.

The S&P Global Canada manufacturing Purchasing Managers' Index fell to 48.4 in November from 49.6 in October, indicating a contraction of the sector for the tenth straight month.

Employment registered a modest decline with firms hesitant to replace for quitting employees.

To support the economy, the Bank of Canada lowered interest rates by a quarter point to 2.25% in late October. At the time of announcement, central bank Governor Tiff Macklem was noncommittal about future cuts.

Last week's data released by Statistics Canada revealed that the economy managed to avoid a recession in the third quarter after the GDP rebounded 2.6% year-over-year after falling 1.8% in the second quarter.

The data has reinforced economists' view that Canada's central bank would not institute another rate cut in its December meeting.

Major sectors that gained in today's trading were Healthcare (2.75%), Consumer Staples (0.22%), Energy (0.17%), and Materials (0.06%).

Among the individual stocks, Bausch Health Companies Inc (11.26%), Curaleaf Holdings Inc (4.63%), Nutrien Ltd (3.63%), International Petroleum Corp (1.45%), and Arc Resources Ltd (1.36%) were the prominent gainers.

Major sectors that lost in today's trading were Industrials (0.60%), Financials (1.02%), Real Estate (1.11%), and IT (4.14%).

Among the individual stocks, Dye & Durham Ltd (8.00%), Celestica Inc (7.27%), Shopify Inc (6.32%), and First Capital REIT Units (2.90%) were the notable losers.