Canada Stocks: TSX down on energy slump, hot inflation data

Baytex Energy

22/06/2022 15:01

(Updates prices, adds analyst comments)
    By Amal S
    June 22 (Reuters) - Canada's main stock index fell on
Wednesday after energy shares plunged on lower crude prices and
as hotter-than-expected domestic inflation data fueled worries
about aggressive interest rate hikes.
    At 9:41 a.m. ET (1341 GMT), the Toronto Stock Exchange's
S&P/TSX composite index  .GSPTSE  was down 366.36 points, or
1.9%, at 18,890.93.
    The energy sector  .SPTTEN  fell 6.5% after oil prices
tumbled on news of a plan by U.S. President Joe Biden to cut
fuel costs for drivers amid concerns over a potential economic
recession. O/R 
    Leading declines on the TSX, Baytex Energy  BTE.TO , Secure
Energy Services  SES.TO , MEG Energy  MEG.TO  fell between 7.8%
and 8.4%.
    Canada's annual inflation rate accelerated to 7.7% in May,
the highest since January 1983, on gasoline prices, as well as
services like hotels and restaurants, Statistics Canada
said. urn:newsml:reuters.com:*:nSCLMHEI2R
    Analysts polled by Reuters had expected the annual rate to
rise to 7.4% in May from 6.8% in April.
    "In such a scenario, it is likely that the Bank of Canada
will resort to boosting its interest rates further up, possibly
by about 75 basis points in its upcoming policy meeting in an
effort to rein in inflation," said Kunal Sawhney, chief
executive officer of Kalkine Group.
    The risk of inflation becoming entrenched in Canada's
economy is growing, say analysts, as surging prices for gas and
other highly visible consumer items undercut efforts by the Bank
of Canada to keep expectations for price increases in
check. urn:newsml:reuters.com:*:nL1N2Y31OQ
    The materials sector  .GSPTTMT , which includes precious and
base metals miners and fertilizer companies, lost 2.3% as copper
prices slumped to their lowest level in over a year. MET/L 
    Bombardier Inc  BBDb.TO  workers on a key program for the
Canadian business jet maker will decide on Wednesday whether to
accept a new contract offer or walk off the job. Shares fell
1.5% in early trading.  urn:newsml:reuters.com:*:nL1N2Y81RN
    
    
    
    

 (Reporting by Amal S in Bengaluru; Editing by Amy Caren Daniel)
 ((amal.s@thomsonreuters.com;))