CANADA STOCKS-TSX hits 3-week low as Omicron, tax-loss selling weighs down


Band Fergal Smith

TORONTO, December 20 (Reuters)The main Canadian stock index fell to its lowest level in nearly three weeks on Monday, under pressure from tax-loss selling and the spread of the Omicron variant as well as a drop in Bank of Montreal shares BMO.TO after its biggest buyout ever.

Toronto Stock Exchange S & P / TSX Composite Index .GSPTSE finished down 200.97 points, or 0.97%, to 20,538.22, its lowest closing level since Dec. 1.

Wall Street also fell as European countries weighed in further restrictions to limit the spread of the Omicron variant and the outlook for a domestic spending bill in the United States suffered a setback.

“The markets are cause for concern,” said Greg Taylor, portfolio manager at Purpose Investments. “You also have the tax loss selling.… The gold and the cannabis and some of the renewable energy stocks have really been crushed.”

Investors often resort to tax-loss selling strategies, shedding stocks that have performed poorly in order to reduce capital gains taxes as the year draws to a close.

The Toronto market has fallen 5.8% since reaching a record high in November, but investors have not lost hope of a year-end recovery.

“There is still time to bounce back,” Taylor said. “There’s still that wall of money and people wanting to buy dips.”

The heavily weighted financial group fell 0.9% on Monday, with the Bank of Montreal down 1.9% after announcing it would buy BNP Paribas. BNPP.PA American unit, Bank of the West, for $ 16.3 billion.

The healthcare sector lost 2.7%, including declines for cannabis producers, while technology was down 1.8% and industrials finished down 2.5%.

Lundin Mining Corp shares MON.TO fell 16.9% after the company said it would buy sister company Josemaria Resources Inc JOSE.TO.

The materials group, which includes precious and base metals mining companies and fertilizer companies, fell 0.5%, while energy gained 0.3% despite an oil slump of 3, 7%.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)

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