Canada’s main stock index fell on Friday as global risk sentiment took a hit from fears that aggressive rate hikes from central banks would tip the economy into a recession.
At 10:36 a.m. ET (1436 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 151.23 points, or 0.77%, at 19,408.93, setting the index on track for a weekly loss.
The industrials sector dropped 1.4%, tracking sharp losses in U.S. peers after a profit warning from global delivery bellwether FedEx stoked concerns of an economic slowdown.
“The markets are in a bit of a risk-off mode. The really big fear is that we’re going to start to see some earnings warnings from companies as the economy starts to slow down,” said Greg Taylor, portfolio manager at Purpose Investments.
“We are going to hear more concerns on recession that could start affecting demand, which would then see some of these commodities start to get hit more.”
The TSX healthcare sector, which includes cannabis stocks, fell 2.8% and the technology sector fell by 2.7%.
The rate-sensitive financials sector slipped 0.7%, while the energy sector dropped 1.6% as oil prices entered negative territory in volatile trading.
The U.S. Federal Reserve is widely expected to deliver its third straight 75-basis-point rate hike at its policy meeting next week, after recent data failed to alter the expected course of aggressive policy tightening.
Adding to the somber mood, the World Bank said the global economy might be inching toward a recession, while the International Monetary Fund said it expected a slowdown in the third quarter.
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