Canada's S&P/TSX Composite Index fell about 2% on Friday, dropping below the 33,000 level and putting the Toronto market on track for weekly losses of more than 4%. Escalating conflict in the Middle East and disruptions in the Strait of Hormuz fueled a global flight to safety, unsettling risk assets.
The geopolitical turmoil pushed Canadian bond yields higher, weighing heavily on major banks, with shares of RBC (-1.8%), TD (-2.4%), BMO (-2.3%), and Scotiabank (-2.2%) all retreating. At the same time, a stronger US dollar pressured precious metals, dragging down Agnico Eagle, Barrick Gold, and Wheaton Precious Metals by more than 2%.
In the midst of the volatility, energy infrastructure provider South Bow launched a formal open season for its proposed revival of the Keystone XL pipeline project, which aims to increase Canadian crude export capacity by 12%. However, even surging oil prices and record production at Canadian Natural Resources were not enough to lift the broader index, as energy producers also failed to offset the broader market decline.
