Following a streak of nine consecutive days of upward movement, the Canadian market retreated on Monday. Notably, stocks in the technology sector faced substantial selling pressure. Both energy and materials stocks registered declines, attributed to the downturn in commodity prices.
The technology sector experienced a dip as apprehensions grew over the rise of China's cost-effective startup DeepSeek, an emerging formidable force in the AI model arena.
Investors adopted a cautious stance, with eyes set on upcoming monetary policy announcements from the Bank of Canada, the Federal Reserve, and the European Central Bank within the week.
The benchmark S&P/TSX Composite Index commenced the day with a sharp downward gap at 25,347.93, plunged to 25,204.06, and ultimately concluded the session at 25,289.15, down by 179.34 points or 0.7%.
The Information Technology Index saw a decline of 3.44%. Celestica experienced a dramatic 28% drop, heavily investing in AI across applications including energy delivery and supplying products for significant energy-consuming data centers.
Bitfarms plunged by 13.7%, while Converge Technology Solutions, Dye & Durham, Lightspeed Commerce, Descartes Systems Group, BlackBerry, and Kinaxis Inc. suffered losses ranging from 1 to 4%.
Energy sector players Enerflex and Terravest Capital closed lower by 7.6% and 6.8%, respectively. Additionally, Arc Resources, Tourmaline Oil Corp, Precision Drilling Corporation, Topaz Energy, and Vermilion Energy declined between 1.7% and 4%.
In the materials sector, substantial declines were observed with First Majestic Silver, Aya Gold & Silver, Iamgold Corp, SSR Mining, Ivanhoe Mines, MAG Silver Corp, Ero Copper, Silvercrest Metals, Seabridge Gold, and First Quantum Minerals falling between 4% and 6%.
Conversely, Telus Corp, BCE Inc, Riocan REIT, Colliers International, TFI International, and GFL Environmental recorded gains ranging from 1.3% to 4%.
In economic developments, preliminary estimates indicated a 0.1% increase in Canadian wholesale sales for December, following a 0.2% decrease in November.
