Canada Stocks: TSX hits 2-week low as rising interest rates hit sentiment
09/06/2022 21:26
(Adds details throughout and updates prices)
* TSX ends down 228.54 points, or 1.1%, at 20,563.89
* Posts lowest closing level since May 26
* Financials and technology both fall 1.2%
* Materials group loses 1.4%; energy ends 1% lower
By Fergal Smith
TORONTO, June 9 (Reuters) - Canada's main stock index fell
to a two-week low on Thursday, including declines for financial
and resource shares, as the prospect of rising interest rates
globally to tackle inflation pressures weighed on investor
sentiment.
The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 228.54 points, or 1.1%, at 20,563.89, its
lowest closing level since May 26.
"I think that (the drop in Canadian shares) is probably a
reaction maybe to the reality sinking in that interest rates are
on the rise everywhere and that the outlook for stock markets
generally will remain subdued," said Stuart Cole, the head
macroeconomist at Equiti Capital.
"The ECB in a sense was the last bastion of a loose monetary
policy, and now that has gone too."
The European Central Bank confirmed it would end a
long-running bond-buying scheme on July 1 and signaled a string
of interest rate hikes from July as it battles stubbornly high
inflation. urn:newsml:reuters.com:*:nF9N2UZ02K
U.S. stocks were also solidly lower as investors grew
cautious ahead of data on Friday that is expected to show that
consumer prices remained high in May. urn:newsml:reuters.com:*:nL1N2XW26N
Bank of Canada Governor Tiff Macklem said inflation would
dictate how fast Canadian interest rates go up, reiterating that
the bank might need to make more increases in a row or consider
a move larger than 50 basis points. urn:newsml:reuters.com:*:nL1N2XW1H9
The Toronto market's heavily weighted financial services
group fell 1.2%, while technology also ended 1.2% lower.
It included a decline of 8.4% for the shares of enterprise
software solutions company Enghouse Systems Ltd ENGH.TO ,
adding to the previous day's sharp slide.
The materials group, which includes precious and base metals
miners and fertilizer companies, lost 1.4% as gold and copper
prices fell.
Energy gave back some recent, falling 1%, as U.S. crude oil
futures settled 0.5% lower at $121.51 a barrel.
(Reporting by Fergal Smith; Additional reporting by Amal S in
Bengaluru nd Diane Craft)
((fergal.smith@thomsonreuters.com; +1 647 480 7446;))