(RTTNews) – Canadian stocks tumbled after Israel and Iran stepped up attacks, leaving investors to hold back from big moves as inflationary concerns grow bigger.
After opening below yesterday’s close, today the benchmark S&P/TSX Composite Index traded firmly negative before settling at 31,854.98, down by 457.69 points (or 1.42%).
Only two of the 11 sectors posted gains today, with the energy sector leading.
The gulf war entered the twentieth day.
Israel attacked the South Pars natural gas deposit field, shared by Iran and Qatar. The facility is critical for Iran’s domestic energy needs.
In retaliation, Iran targeted energy sites in Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait. Iran launched a counter-offensive targeting Ras Laffan plant in Qatar.
The Qatari government officially confirmed “extensive damage” to the facility and stated that resumption of operations could take more than a year’s time. Many Asian countries rely on Qatar’s energy and hence, the news shocked the markets.
The Ras Laffan facility is located 80 km north of Doha (Qatar’s capital) hosting several international companies including Shell.
Soon after the strikes, Qatar expelled Iran’s military and security attaches.
U.S. President Donald Trump sternly warned Iran not to repeat the attacks on Qatar failing which the U.S. would “blow up” the entire South Pars gas field.
Iran’s Foreign Minister Abbas Araghchi threatened Arabian neighbors not to join hands with the U.S. to reopen the Strait of Hormuz failing which they would be considered Iran’s “enemy.”
In the Pentagon today, U.S. Defense Secretary Pete Hegseth addressed a press conference wherein he stated that the U.S. was on course to its objectives in the war with Iran though he did not give a timeline on when the war could likely end.
The conflict has already virtually blocked shipping transit through the Strait of Hormuz.
The production and supply disruption concerns stoked serious worries of long-term inflationary effects on all major economies.
Yesterday, the Bank of Canada held interest rates at 2.25% as it expects global inflation to move higher in the near-term due to the gulf war. The central bank asserted that it was open to hiking rates if needed.
Being a net oil exporter, Canada has been relatively insulated from crude oil price shocks so far.
On the data front, there were no significant prints to be released today.
High-level officials from Canada are in discussions with their U.S. counterparts to negotiate mutually favorable terms for the upcoming renewal of Canada-United States-Mexico trade agreement.
In a report published today, the World Trade Organization has observed that growth in global trade in goods will decelerate to 1.90% in 2026, from 4.60% in 2025 and could downslope further if the Middle East war continues without an end in sight.
Major sectors that gained in today’s trading were Energy (2.62%) and IT (0.24%).
Among the individual stocks, Vermilion Energy Inc (14.36%), Methanex Corp (6.73%), Cenovus Energy Inc (4.17%), Athabasca Oil Corp (3.27%), Headwater Exploration Inc (3.27%), and Celestica Inc (3.91%) were the prominent gainers.
Major sectors that lost in today’s trading were Industrials (1.26%), Real Estate (1.77%), Consumer Discretionary (1.83%), Consumer Staples (2.06%), and Materials (5.09%).
Among the individual stocks, B2Gold Corp (8.25%), Endeavour Silver Corp (8.22%), Novagold Res Inc (7.91%), Seabridge Gold Inc (7.84%), Premium Brands Holdings Corporation (6.52%), and Dollarama Inc (3.23%) were the notable losers.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
