TSX falls after Canada’s finance minister abruptly resigns

By Ragini Mathur

(Reuters) – Canada’s main stock index fell on Monday after Finance Minister Chrystia Freeland abruptly withdrew ahead of the midterm budget as investors awaited the Federal Reserve’s interest rate decision later this week.

At 10:05 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite was down 0.1% at 25,253.86.

Freeland quit just hours before she was due to present an economic update to parliament, a document widely expected to show the Liberal government had run a much larger budget deficit in 2023/24 than planned.

“Her reference to – “expensive political gimmicks that we can ill afford and that make Canadians doubt we recognize the gravity of the moment” – does not give investors confidence in the government’s response to proposed 25% tariffs by the Trump administration ,” said Graham Priest, Investment Advisor, BlueShore Financial.

“Canada likely missed deficit targets. Investors do not have strong confidence in the current government.”

Oil prices fell about half a percent, pressured by weaker-than-expected consumption in China, the world’s biggest oil importer. (OR)

However, gold prices rose against a softer dollar ahead of the Fed’s policy meeting on Wednesday, where the central bank is expected to deliver a third rate cut this year and hint at its outlook for 2025.

A survey showed U.S. manufacturing activity fell further in December, with a measure of factory output falling to the lowest level in more than 4-1/2 years.

The Bank of Canada cut its key interest rate by 50 basis points last week to help counter slower growth, although Governor Tiff Macklem indicated further cuts would be more gradual and said he does not expect a recession.

In corporate news, BlackBerry jumped 15% after it agreed to sell its Cylance business to Arctic Wolf.

(Reporting by Sruthi Shankar and Ragini Mathur in Bengaluru; Editing by Shounak Dasgupta and Shailesh Kuber)