Canada Stocks: TSX extends monthly decline as investors eye more rate hikes

Centerra Gold

31/05/2023 21:50

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      TSX ends down 0.9% at 19,572.24
    

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      Posts a decline of 5.2% in May
    

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      Canada posts first-quarter growth of 3.1%
    

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      Energy falls 2%; oil settles 2% lower
    

  
 (Adds investor quotes and details throughout, updates prices)
    By Fergal Smith
       May 31 (Reuters) - Canada's main stock index fell on
Wednesday to its lowest closing level in two months, as oil
prices weakened and investors fear that the Federal Reserve and
Bank of Canada could raise interest rates further to tackle
inflation.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended down 167.46 points, or 0.9%, at 19,572.24, its
lowest closing level since March 24. For May, it lost 5.2%, its
biggest monthly decline so far in 2023. 
    "The overriding theme remains inflation and interest rates,"
said Michael Sprung, president at Sprung Investment Management.
    "It certainly sounds like another increase in the U.S. would
not be out of the question and that would put Canada in a
position where it would have to follow suit."
    U.S. stocks also fell as investors weighed the impact of
unexpectedly strong labor market data on the Fed policy outlook.
    Separate data showed that Canada's economy grew 3.1% in the
first quarter, faster than expected, bolstering bets for another
BoC rate hike.
    "The one bright light is that you can pick up some pretty
attractive yields right now, particularly on the financials and
a number of the utilities," Sprung said.
    Heavily weighted financials fell 1.1%, with National Bank of
Canada  NA.TO  down 2.8% after the bank missed earnings
estimates.
    Energy lost 2% as weak economic data from top oil importer
China pressured crude prices. U.S. crude oil futures  CLc1 
settled nearly 2% lower at $68.09 a barrel.
    Shares of Centerra Gold Inc  CG.TO  surged 9.8% after the
bullion miner said it received an official approval for its
Öksüt mine in Turkey.
    Teck Resources Ltd  TECKb.TO  shares gained 2.3% after a
report saying that Glencore Plc  GLEN.L  was working on a
potential improvement to its bid for the Canadian miner.

 (Reporting by Fergal Smith in Toronto and Johann M Cherian and
Vansh Agarwal in Bengaluru; Editing by Shweta Agarwal and
Richard Chang)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446;))