Canada's main stock index retreated on Thursday for a third straight day as U.S. political worries weighed on sentiment and a pullback in some base-metal prices drove down the materials group.
U.S. and European equities also lost ground as investors trimmed their exposure to riskier assets amid ongoing uncertainty over whether the Trump administration will be able to proceed with its economic agenda and after cautious tones from U.S. and European central banks.
The TSX is taking its cue from U.S. markets, said Paul Taylor, chief investment officer of fundamental equities at BMO Asset Management Inc. "It is a market where the fundamentals are pretty good but the politics are pretty bad," he said.
Canada's economy has strengthened this year, prompting the Bank of Canada to raise interest rates in July for the first time in nearly seven years.
The Toronto Stock Exchange's S&P/TSX composite index closed down 48.57 points, or 0.32 per cent, at 15,033.64.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.5 per cent as aluminum, copper and other base metals retreated from multi-year peaks.
Fertilizer company Potash Corp of Saskatchewan Inc declined 1.9 per cent to C$21.90, and diversified miner Teck Resources Ltd fell 1.7 per cent to C$29.25.
Among raw materials mined by Teck is copper, whose price in global markets fell 0.9 per cent to $6,472.50 a tonne.
First Quantum Minerals Ltd, another base metal miner, fell 1.8 per cent to C$13.17.
Base metals fell as some investors locked in profits from a steep rally amid doubts about future demand in top metals consumer China.
Financial shares also lost ground, falling 0.4 per cent, as a deadly car attack in Barcelona for which Islamic State claimed responsibility helped drive down the yields on safe-haven government bonds.
Lower bond yields raise the value of insurance companies' liabilities and increase net interest margins of banks.
U.S. crude prices settled 31 cents higher at $47.09 a barrel as investors focused on U.S. oil stockpile declines.
But the energy group was unable to hang onto earlier gains, ending down 0.3 per cent.
Valeant Pharmaceuticals International Inc gained 1.6 per cent to C$18.18 after the company said it had resolved the concerns of U.S. authorities about its Bausch + Lomb facility in Tampa, Florida.
Prometic Life Sciences Inc declined 6.4 per cent to C$1.17, adding to a string of declines since reporting revenue that sharply missed expectations last week.
S&P 500 posts biggest daily drop in three months
U.S. stocks sold off on Thursday, pushing the S&P 500 to its lowest in a month, as escalating worries about the Trump administration's ability to push through its agenda rattled investors.
The benchmark index also posted its biggest percentage fall since May 17.
The Dow Jones Industrial Average <.DJI> fell 274.48 points, or 1.25 per cent, to end at 21,750.39, the S&P 500 <.SPX> lost 38.05 points, or 1.54 per cent, to 2,430.06 and the Nasdaq Composite <.IXIC> dropped 123.20 points, or 1.94 per cent, to 6,221.91.