Canada’s resource-heavy main index hit a more than one-week low on Tuesday, dragged down by energy and mining stocks, while investors awaited more clarity on central banks’ monetary policy tightening path.
At 9:56 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 132.22 points, or 0.66%, at 19,801.99.
Materials and energy stocks dropped over 2% each on lower prices of precious metals and crude oil.
The technology sector bucked the trend by rising 0.4%, led by a 1.8% gain in online services provider Shopify after brokerage Oppenheimer raised price target on the stock.
Wall Street’s main indexes fell after better-than-expected housing data fuelled worries of more rate hikes by the Federal Reserve.
Traders see a 74% chance of just one 25-basis-point rate hike in July, according to CMEGroup’s FedWatch Tool.
Fed Chair Jerome Powell’s semi-annual monetary policy testimony on Wednesday will be closely monitored after the U.S. central bank projected rates rising by as much as half a percentage point by the year-end.
Investors will also monitor domestic retail sales data and the Bank of Canada’s minutes from its policy decision two weeks ago, when it hiked its benchmark rate for the first time since January. Both are scheduled to be released on Wednesday.
“There’s a feeling that now they’re going to raise until something breaks because things have not broken yet… employment numbers are still strong and people are still able to finance their mortgages,” said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management.
Dream Office REIT slumped 11.7%. Brokerage TD Securities cut price target on the stock. Besides, the company announced preliminary results of its $193.8 million issuer bid after market close on Monday.
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