Canada's main stock index fell on Monday, with financials down and several auto parts makers losing ground as U.S. President-elect Donald Trump upped pressure on carmakers to build in the United States.
The most influential weights on the Toronto Stock Exchange's S&P/TSX composite index included Magna International Inc, which fell 3.1 per cent at $56.98, and Linamar Corp, which lost 3.5 per cent to $55.65.
Trump warned German carmaker BMW he would impose a border tax of 35 per cent on vehicles they build in Mexico and export to the U.S. market, according to excerpts of a German newspaper interview released on Sunday.
While most of Trump's attention has been focused on the use of Mexican plants, it is not clear that Ontario's auto industry, closely intertwined with that of Detroit, will escape unharmed.
The Toronto Stock Exchange's S&P/TSX composite index closed down 17.99 points, or 0.12 per cent, at 15,479.29. Six of the index's 10 main groups ended lower.
The market is pulling back ahead of Trump's inauguration as president on Friday, said Harrison Newlands, research associate at Macnicol & Associates.
The index has rallied more than 5 per cent since Trump's election victory on Nov. 8, helped by optimism he will cut corporate taxes, spend on infrastructure and deregulate banks.
Gold climbed to its highest in more than seven weeks on Monday on buying fueled by political uncertainty after comments by Trump on NATO and China.
Recent large swings in gold point to a pickup in stock market volatility amid global political and economic uncertainty, said Newlands, who expects bond yields to resume their recent push higher after the inauguration.
He sees a positive outlook for the TSX due to its large concentration of gold stocks and as Canadian companies benefit from a stronger U.S. dollar and robust U.S. consumption.
Barrick Gold Corp rose 1.5 percent to $22.50 and Pan Am Silver Corp gained 2.2 per cent to $23.44.
But the materials group, which includes precious and base metals miners and fertilizer companies, slipped 0.1 per cent, while the heavyweight financials group declined 0.3 per cent.
Stella-Jones Inc slumped 7.5 per cent to $39.50 after several banks cuts their price targets and recommendations on the lumber company after it said lower demand for railway ties would hurt its quarterly profit and revenue.
The energy group retreated 0.2 per cent even as oil gained. U.S. crude prices rose 0.5 per cent to US$52.64 a barrel.