Canadian Shares Exhibiting Weakness; Cannabis Stocks Tumble

(RTTNews) - The Canadian stock market slipped into negative territory Friday morning, led by losses in healthcare and consumer staples sections.

Despite positive comments from U.S. President Donald Trump and Chinese President Xi Jinping, uncertainty about a trade deal lingered and this prompted investors to refrain from picking up stocks.

The benchmark S&P/TSX Composite Index was down 47.50 points, or 0.28%, at 16.951.69 at noon. The index edged up to 17,012.54 at the start and subsequently declined to 16,935.72.

The Capped Healthcare Index was down 4.3%, dragged down by losses in cannabis shares. Hexo Corp. (HEXO.TO), which soared more than 35% in the previous session, lost about 11% this morning. Aurora Cannabis (ACB.TO) declined 10%, Canopy Growth Corporation (WEED.TO) shed 7%, Cronos Group Inc. (CRON.TO) lost 6.7% and Aphria Inc. (APHA.TO) was down 5%.

In the consumer staples space, Saputo Inc. (SAP.TO), Empire Company (EMP.A.TO) and Metro Inc. (MRU.TO) lost 1.4 to 1.7%. Weston George (WN.TO) declined 1%.

Loblaw Limited (L.TO) announced the launch of a "Curated marketplace" online Thursday that will include new brands and products, in order to compete with Amazon for Canadian market share. The stock was down by about 0.6% at noon.

Among energy shares, Crescent Point Energy (CPG.TO), Tourmaline Oil Corp (TOU.TO), Baytex Energy (BTE.TO), Encana Corp (ECA.TO), Cenovus Energy (CVE.TO) and Vermilion Energy (VET.TO) lost 1 to 2%.

Investors were also digesting Canadian retail sales data which was in line with expectations. The report from Statistics Canada showed retail sales fell 0.1% on a seasonally adjusted monthly basis after a revised 0.1% rise in August.

Core retail sales excluding motor vehicle and parts dealers rose 0.2% from August, when it fell a revised 0.1%. The reading was forecast to fall by 0.3%.

Trump said in an interview on Fox News this morning that a trade agreement with China is "very close" and that the two economic superpowers have a "very good chance to make a deal."

According to a report in South China Morning Post, Chinese President Xi Jinping said the country is working for an agreement on the basis of 'mutual respect and equality' for phase one agreement.

However, he said China will not shy away from retaliation if necessary.

Jinping made these comments while speaking to delegates and journalists at the Bloomberg New Economy Forum in Beijing.

Still, investors were in no mood to create fresh positions, and instead, looked keen on trimming down commitments, choosing to wait for meaningful developments on the trade front.