Toronto stock market flat despite increase in housing starts

Despite favorable housing data, Canada's main stock market closed the day after Thanksgiving long weekend slightly down, dragged by information technology stocks.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index retreated 16.66 points, or 0.11 percent, to close at 14,549.60 points. Eight of the ten sub-sectors in the index were in negative territory on the day.

Government-owned Canada Mortgage and Housing Corporation (CMHC) reported on Tuesday that the construction of new housing projects in September rose to an annualized rate of 220,617 units, beating the 190,000 expectation. The report also revealed that all of Canada saw increases during the month except for Ontario, which saw a 4-percent decrease.

Despite the 19.8-percent increase from 184,201 new projects started in August, Diana Petramala, economist at TD Bank expects the figure to fall back down to the August levels due to the recent unfavorable regulations imposed by the Federal Government.

"The pace of housing construction is likely to ease through the rest of 2016. For one, the new mortgage and tax regulation introduced by the Federal Government last week is likely to shave up to 10 percent off home sales over the remainder of the year, and homebuilding activity will likely follow suit," said Petramala in a report. "We expect housing starts to moderate to a pace of about 180k units by early next year."

During the trading session, Information Technology sector lost the most ground, losing 1.77 percent on the same day that the tech-heavy NASDAQ fell 1.54 percent south of the boarder. Blackberry Limited saw shares declined 2.87 percent to 10.15 Canadian dollars (7.66 U.S. dollars), while Sierra Wireless Inc. shares dropped 3.07 percent to close at 17.99 Canadian dollars (13.58 dollars).

Meanwhile, the TSX Materials group, which features miners of gold and other metals also took a hit, falling 0.58 percent during the session. Toronto-based gold miner Yamana Gold Inc. was the most actively traded, with 7 million shares traded; shares fell 0.62 percent to 4.82 Canadian dollars (3.64 dollars).

On a positive note, Class B shares of Teck Resources saw shares rise 4.43 percent to 24.27 Canadian dollars (18.32 dollars) after a Peruvian mine in which they own 22.5 percent stake announced their intention to double zinc production next year due to expected price of the metal.

The energy sector was one of the lone bright spots on the day, with a 1.24-percent surge. Calgary-based energy giants Suncor Energy Inc., Encana Corporation and Baytex Energy Corp. saw shares advance 1.43 percent, 1.73 percent and 1.60 percent, respectively during the day. The sector continues its recent strong performance, rising 11.67 percent in the past two weeks.

Brent crude oil prices rose 1.45 percent for December delivery to close at 52.50 U.S. dollars a barrel in London.

The Canadian dollar was up 0.0021 on the day to finish at 0.7550 U.S. dollars, compared to Friday's closing rate of 0.7529 U.S. dollars. Endit