TSX hits another high as pot stocks fall after US Attorney General

first_imgTORONTO – It was another record close for Canada’s main stock index despite a sharp drop in the health-care sector, which includes some of the country’s biggest marijuana companies.The S&P/TSX composite index was up 41.39 points to 16,412.94, gaining ground throughout the day after flatlining earlier on Thursday amid a free fall in cannabis stocks.Pot stocks were pummelled after The Associated Press reported that U.S. Attorney General Jeff Sessions will rescind an Obama-era policy that generally barred federal law enforcement officials from interfering with marijuana sales in states where the drug is legal.“That’s added huge volatility today to the marijuana stocks. They all sold off huge in the morning, came back part way during the day and seemed to be cooling off again,” said Norman Levine, managing director of Portfolio Management Corp.“It just shows the unbelievable volatility of these groups because there aren’t really fundamentals in valuations behind it. These are emotionally driven stocks. It shows that even though the vast majority of these stocks have little to do with the United States, it doesn’t take much to set them off one way or another.”Shares of major licensed Canadian cannabis producers such as Canopy Growth Corp. (TSX:WEED) and Aphria Inc. (TSX:APH) were down 9.97 per cent and 13.79 per cent at the close of markets Thursday.South of the border, Wall Street indices also hit consecutive all-time highs as the Dow Jones industrial average breached the 25,000 mark for the first time, just five weeks since its first close above 24,000. It climbed 152.45 points to settle at 25,075.13.The S&P 500 index added 10.93 points to 2,723.99 and the Nasdaq composite index advanced 12.38 points to 7,077.92.Strong global economic growth and good prospects for higher company earnings have analysts predicting more gains for the Dow, although the market may not stay as calm as it has been recently.The Dow has made a rapid trip from 24,000 points on November 30, partly on enthusiasm over passage of the Republican-backed tax package, which could boost company profits this year with across-the-board cuts to corporate taxes.“For a long while in 2017 I would say the biggest driver was excitement and anticipation over tax reform, but at a certain point I think there was a handover to global economic growth really helping to carry the stock market,” said Kristina Hooper, chief global markets strategist at Invesco.In currency markets, the Canadian dollar closed at an average trading value of 79.90 cents US, up 0.11 of a U.S. cent.On the commodities front, the February crude contract gained 38 cents to US$62.01 per barrel and the February natural gas contract was down 13 cents to US$2.88 per mmBTU.The February gold contract was up US$3.10 to US$1,321.60 an ounce and the March copper contract added one cent at US$3.26 a pound.– With files from The Associated Press.Follow @DaveHTO on Twitter.last_img