TORONTO — Canada's main stock index retreated from last week's record closing high despite the energy sector rising on crude oil reaching a near seven-month high.
Oil prices rose on the Trump administration's announcement that it will scrap waivers from U.S. sanctions for five countries if they import oil from Iran.
"That obviously poses a challenge to global supply, which is providing a lift to oil prices," said Craig Fehr, Canadian markets strategist for Edward Jones.
The energy sector of the TSX gained 1.55 per cent Monday, led by Crescent Point Energy Corp., which was up 7.5 per cent.
The June crude contract was up $1.48 at $65.55 per barrel and the June natural gas contract was up 2.3 cents at US$2.56 per mmBTU.
Oil prices reached their highest level since the end of October and are up about 50 per cent this year. But Fehr said the higher prices might prompt some producers to make up for some of the lost Iranian supply.
"I think it's reasonable that we're going to see some producers want to come in and capture some of these higher prices, which means that we could see some of the reduction in production offset by a ramp-up in production from other markets," he said in an interview.
Energy was just one of two major sectors to gain on the day, following the 3.1 per cent increase by the cannabis-heavy health care sector. Nine sectors fell, including financials and materials.
The large financial sector is increasingly becoming a barometer for the domestic economy, Fehr said.
"I think the banks are increasingly going to become a proxy for the outlook for slower growth domestically."
The Canadian dollar traded at an average of 74.89 cents US, up from an average of 74.73 cents US on Thursday before the holiday weekend.
The June gold contract was up US$1.60 at US$1,277.60 and the May copper contract was down 1.85 cents at US$2.90 a pound.
The S&P/TSX composite index closed down 35.53 points at 16,577.28 after hitting an intraday all-time high of 16,616.28.
In New York, the Dow Jones industrial average was down 48.49 points at 26,511.05. The S&P 500 index was up 2.94 points at 2,907.97, while the Nasdaq composite was up 17.21 points at 8,015.27.
North American markets were little changed ahead of a busy week when one-third of U.S. corporations release earnings, the Bank of Canada discloses its latest interest rate decision and U.S. GDP numbers are unveiled for the first quarter.
Fehr foresees supportive numbers being released on all three fronts but perhaps not enough to catapult markets higher
"I look at the sizable gains that we've seen in equity markets, including the TSX reaching an all-time high last week, and I think it's pricing in a good degree of the positive news that we're likely to get this week."
Some of technology's biggest names, including Amazon, Facebook and Microsoft will report later this week.
"The earnings there will provide a really fresh take for investors on just how healthy corporate profits are likely to be over the balance of the year."
Index and currency in this story: (TSX:CPG, TSX:GSPTSE, TSX:CADUSD)