Canadian Stocks Slide Amid Cancellation Of U.S.-Iran Talks, Fierce Lebanon-Hezbollah Strikes

(RTTNews) - Canadian stocks inched lower on Friday as investors weighed the U.S.-Iran Memorandum of Understanding signed on Wednesday against the sudden cancellation of today's planned first round of U.S.-Iran talks in Switzerland amid fresh Israel-Hezbollah attacks.

After opening below yesterday's close, today the benchmark S&P/TSX Composite Index gathered momentum initially but soon turned lower. Then, despite gaining ground, it remained volatile throughout the session before settling at 34,857.34, down by 111.92 points (or 0.32%).

Five of the 11 sectors posted gains today, with the energy sector leading the pack.

Soon after the U.S.-Iran war began on February 28, Iran effectively shut the Strait of Hormuz, thereby blocking the transit of oil and energy cargo carriers.

Consequently, with supply concerns affecting all major global economies, oil prices skyrocketed.

On Wednesday, in France, U.S. President Donald Trump signed a 14-point Memorandum of Understanding with Iran, aimed to end the conflict through negotiations slated to be held over a 60-day ceasefire period.

The document was then sent to Iran where Iran's President Masoud Pezeshkian affixed his signature.

The signing was earlier planned to be held at the Burgenstock Resort of Switzerland today. For undisclosed reasons, Trump advanced the signing to Wednesday.

The U.S. lifted the sanctions imposed on Iran to sell its oil and revoked the naval blockade on ships entering or exiting Iranian ports.

The deal allowed the immediate reopening of the Strait of Hormuz, offering a breather to global markets and ship owners.

However, energy experts cautioned that resumption of oil traffic might not necessarily translate into restoration of crude oil output to pre-war levels immediately.

According to observers, complete removal of the sea mines planted by Iran even under ideal conditions could take more than four months.

In addition, the willingness of insurance companies to re-insure the vessels as well as the consent of shipowners to allow their fleet to sail is uncertain.

As a part of this deal, Iran also demanded a complete cessation of Israeli attacks on Lebanon.

Overnight, Hezbollah killed four Israeli soldiers near Nabatieh in south Lebanon. In retaliation, Israel carried out a barrage of airstrikes in south Lebanon and the Bekka valley killing around 18 people.

In a strongly worded statement, Israel's national security minister Itamar Ben-Gvir stated that all of Lebanon must burn. Ben-Gvir had earlier stated that Trump's agreement does not bind Israel.

Today, the first round of negotiations due to begin in Obburgen in Switzerland were called off at a short notice.

U.S. Vice President JD Vance who was set to fly to Switzerland to begin negotiations with his Iranian counterparts cancelled his trip.

On Wednesday, the U.S. Federal Reserve announced holding the interest rates at the current 3.50% to 3.75% range. The Fed's Dot Plot indicated a higher interest rate regime in the near-term which weighed on gold prices.

Way back from the G7 Summit in Paris on Wednesday, Trump expressed disinterest in renewing the Canada-United States-Mexico Agreement on free-trade.

By July 1, Canada, United States, and Mexico must declare if they wish to continue the CUSMA beyond 2036 when it expires. Any country can withdraw by giving six month's written notice.

While Mexico and Canada want an extension, Trump has been indicating that the deal does not help America much.

High-level officials from Canada are in the U.S. to renegotiate the terms of the deal.

On the data front, the Business Barometer long-term index provided by Canadian Federation of Independent Businesses rose to 49.60 in June from 46.30 in May. However, the short-term optimism index declined to 46.10 from 48.10 in the prior month.

Data from Statistics Canada revealed that retail sales surged by 1.00% from the previous month in May, according to a preliminary estimate.

Of note, U.S. markets remain closed today on account of Juneteenth Federal Holiday.

Major sectors that lost in today's trading were Financials (0.05%), Communication Services (0.24%), Utilities (0.41%), Consumer Staples (0.65%), Healthcare (0.70%), and Materials (2.07%).

Among the individual stocks, Alamas Gold Inc (18.44%), Wheaton Precious Metals Corp (4.78%), Torex Gold Resources Inc (4.22%), and Bausch Health Companies Inc (2.52%) were the notable losers.

Major sectors that gained in today's trading were Energy (0.67%), IT (0.30%), Industrials (0.21%), Real Estate (0.10%), and Consumer Discretionary (0.08%).

Among the individual stocks, Parex Resources Inc (6.04%), Tamarack Valley Energy Ltd (3.86%), Enerflex Ltd (2.96%), Dye and Durham Limited (7.06%), and Descartes Sys (3.73%%) were the prominent gainers.

5N Plus Inc (6.84%), Atkinsrealis Group Inc (6.44%), and Mda Space Ltd (6.29%) were among the prime market-moving stocks today.