Weak Manufacturing Data Drags Canadian Equities Lower; Tech Sector Faces Pressure

Canadian equities retreated on Monday afternoon as weak manufacturing data and sector-specific headwinds pressured the market. The S&P/TSX Composite Index declined 141.94 points, settling at 31,240.84, representing a 0.45% loss as uncertainty gripped the market ahead of major bank earnings and key U.S. economic releases this week.

Manufacturing Contraction Weighs on Market Sentiment

The primary culprit behind the selloff was deteriorating manufacturing conditions. The S&P Global Canada Manufacturing PMI slipped to 48.4 in November from 49.6 the previous month, marking the tenth consecutive month of sector contraction. This reading signaled ongoing weakness in Canada’s manufacturing sector, creating a headwind for risk-on sentiment across the broader market.

Technology and Financial Stocks Lead Declines

The Information Technology Capped Index bore the brunt of the decline, dropping 2.91% as major tech names tumbled. Shopify lost 4.8%, while Celestica and Bitforms fell 5.9% and 5.7% respectively. Mid-cap tech players including Dye & Durham, BlackBerry, Sangoma Technologies, TecSys, Enghouse Systems, Constellation Software and Coveo Solutions also retreated, each down between 1% and 2.2%.

The financial services sector showed comparable weakness. Bank of Montreal, Canadian Imperial Bank of Commerce, Sun Life Financial and Intact Financial each dropped 1% to 2%. Royal Bank of Canada, Bank of Nova Scotia and Laurentian Bank also declined, though specifics weren’t quantified.

Communications stocks contributed to the downside, with Cogeco Communications, Telus Corp. and Quebecor falling 2%, 1.6% and 1.4% respectively.

Defensive Names and Cyclicals Provide Bright Spots

Not all sectors capitulated. Bausch Health Companies surged over 14.5%, providing a rare bright spot in the market. Commodity-linked and economically-sensitive names showed resilience, with gains distributed across Aecon, First Majestic Silver, Canada Goose Holdings, Teck Resources, TFI International, Endeavour Mining, Neo Gold, Ovintiv, Nutrien, Methanex, SNC Lavalin, Ero Copper and George Weston, each advancing between 2% and 5%.

The mixed performance underscores investor hesitation as markets brace for forthcoming earnings season and macroeconomic releases that could reshape near-term sentiment.