Canada Stocks: TSX falls to three-week low as US tech earnings weigh

Veren

31/10/2024 15:20

(Updated at 10:34 a.m. ET/ 1434 GMT)
    By Nikhil Sharma
       Oct 31 (Reuters) - Canada's main stock index fell to a
three-week low on Thursday in a wider selloff led by technology
shares, after uninspiring earnings from Wall Street tech giants
dampened overall market sentiment.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  was down 324.43 points, or 1.32%, at 24,183.36.
However, the index was set to log monthly gains.
    At least ten sectors on the index nursed losses led by a
2.4% drop in the information technology sector  .SPTTTK ,
mirroring a steep fall in the tech-heavy Nasdaq index  .IXIC .
    The materials sector  .GSPTTMT  and heavyweight financials
 .SPTTFS  also dropped 2.3% and 1.2%, respectively.
    Wall Street was the overall driver for declines, as main
indexes fell following warnings from Microsoft and Meta
Platforms about soaring AI costs, stoking fears that the return
on heavy investments in the technology might take longer than
expected.  .N 
    "It's unusual for the Canadian market to totally detach from
the U.S. on a short-term basis. So, selling pressure in the U.S.
taints the sentiment in Canada," said Brian Madden, chief
investment officer at First Avenue Investment Counsel.
    Among economic data, Canada's gross domestic product was
unchanged in August before likely expanding by 0.3% in
September, indicating the economy missed the Bank of Canada's
growth forecast for the third quarter.
    The BoC last week slashed interest rates by an unusually
large half-percentage-point to boost the economy. Also, Governor
Tiff Macklem earlier this week said more rate cuts could be
implemented if the economy evolves broadly in line with
forecasts. 
    The energy sector  .SPTTEN  also fell despite a rise in oil
prices, driven by a 13.4% slump in Veren  VRN.TO , the
worst-performing stock in TSX today, after it reported its
third-quarter results. 
    Drugmaker Bausch Health Companies  BHC.TO  rose 11.1% after
strong third-quarter results, making healthcare  .GSPTTHC  the
only sector to gain with a 2.5% increase.

 (Reporting by Nikhil Sharma in Bengaluru; Editing by Vijay
Kishore)
 ((Nikhil.Sharma@thomsonreuters.com;))