Canada's main stock index fell on Monday as a spike in US Treasury yields fueled concerns about the prospect of higher interest rates.
At 9:44 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 122.26 points, or 0.58%, at 20,962.19, as technology stocks hit its lowest level since May 2021.
Toronto-listed technology stocks fell 2.3%, and were on track for its sixth-consecutive session in losses mirroring weakness in US tech-heavy Nasdaq index.
"Its going to be a continuation of last week's pattern and I think everyone's watching bond yields to get a signal. Yields are up, so that's going to put pressure on tech stocks," said Gregory Taylor, portfolio manager at Purpose Investments.
US Treasury yields reached a new two-year high and investors fretted about the prospect of a more hawkish Fed this year, especially the timing of interest rate hikes.
Higher interest rates reduce the value to investors of the future cash flows that technology and other high growth sectors are expected to produce.
The energy sector climbed 0.1% as oil prices were largely steady as supply disruptions in Kazakhstan and Libya offset worries stemming from the rapid global rise in Omicron infections.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.1% as gold futures fell 0.3% to $1,791 an ounce.
On the bright spot, Tilray Inc jumped 12% and was the largest percentage gainer on the index, after the Canadian cannabis producer reported a surprise quarterly profit.
Highlights
The TSX posted fourteen new 52-week highs and eight new lows.
Across all Canadian issues there were 48 new 52-week highs and 65 new lows, with total volume of 37.75 million shares.
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