Canada Stocks: TSX falls as commodity-linked stocks weigh; Fed decision in focus

goeasy

29/01/2024 15:57

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      TSX down 0.3%
    

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      Materials and energy top losers  
    

  
 (Updated at 10:22 a.m. ET/ 1522 GMT)
    By Purvi Agarwal and Khushi Singh
       Jan 29 (Reuters) - Canada's main stock index fell on
Monday, hurt by a sell-off in energy and material stocks, while
investors grew cautious ahead of key domestic economic data and
the U.S. Federal Reserve's monetary policy decision later this
week.
    At 10:22 a.m. ET (15:22 GMT), the Toronto Stock Exchange's
S&P/TSX composite index  .GSPTSE  was down 53.70 points, or
0.25%, at 21,071.58. The benchmark index is set to log its worst
day in nearly two weeks.
    The energy sector  .SPTTEN  led the losses, falling 0.7%,
and was on track to snap a five-day streak of gains, after oil
prices dipped against the backdrop of Chinese demand concerns.
 O/R 
    The materials sector  .GSPTTMT , housing Canadian miners,
slipped 0.5% tracking lower copper prices after a firmer dollar
and China's ailing property sector sparked demand worries.
 MET/L 
        Meanwhile, investors remained cautious ahead of the
Fed's decision on borrowing costs, due on Wednesday.
  
    "There's been a lot more talk recently that the Fed could
lower rates in March, around the idea that the most recent U.S.
inflation data shows the six-month inflation rate is actually
below 2%," said Allan Small, senior investment advisor of the
Allan Small Financial Group with iA Private Wealth.
    "So the Federal Reserve will consider lowering rates
sometime soon." 
    A November reading of Canada's gross domestic product (GDP)
will also be released on Wednesday that could provide some more
clues on the country's economic health, and the Bank of Canada's
future interest rate path.
    "GDP may affect the Bank of Canada in terms of their
rate-setting policy. If the number is negative, it will tell us
we are in a recession. That may speed up the rate cuts here in
our country", Small added. 
    On the corporate side, lender goeasy  GSY.TO  fell 4.3%
after brokerage CIBC downgraded the company's stock to "neutral"
from "outperformer".

 (Reporting by Khushi Singh and Purvi Agarwal in Bengaluru;
Editing by Vijay Kishore)
 ((Khushi.Singh@thomsonreuters.com;))