Losses in industrial and financial shares dragged Canada’s main stock index lower on Wednesday, with investors worrying that aggressive policy tightening by central banks would stifle economic growth.
At 9:39 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 61.64 points, or 0.29%, at 20,866.57, on track to snap its two-day winning streak.
The Organisation for Economic Cooperation and Development on Wednesday cut its 2022 global growth forecast to 2.8% from 3.2%, a day after the World Bank slashed its estimates by nearly a third to 2.9%.
The financial sector slipped 0.6%, while the industrial sector fell 0.9%, leading losses on the index.
Heavyweight energy sector climbed 0.1% for a fourth straight session as U.S. crude prices were up 0.7% a barrel, while Brent crude added 0.9%.
“The general market sentiment right now is tentative. I think people are waiting to see what the central banks have to say. We’re a week out from the Fed meeting, and the 10 year yield is sitting at 3%,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
“The ECB meets tomorrow and that’s the immediate big one.”
The focus of the week is on U.S. consumer inflation data due on Friday.
The Fed is on track to deliver half-a-point interest rate hike at its June and July policy meetings, and a high inflation reading would add to expectations of aggressive tightening even in the second half of the year.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.5%, weighed by weakness in copper prices.
In corporate earnings, Dollarama Inc jumped 2.9% to the top of the index after it beat estimates for quarterly sales as surging inflation fueled demand for the discount store’s groceries and household essentials.
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