Canada’s main stock index fell on Wednesday, with technology and financial shares leading declines, as investors fretted over the prospect of aggressive policy tightening by the U.S. Federal Reserve to tackle inflation.
At 10:26 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 148.11 points, or 0.68%, at 21,782.72, its lowest level since March 18.
On Wall Street, the Nasdaq led declines for a second straight day, ahead of the minutes of the Fed’s March meeting that could indicate just how fast and how far policymakers would proceed in shrinking a massive balance sheet and raising interest rates.
The information technology sector was the biggest decliner among Canada’s 11 main sectors, with a 4.3% drop.
Valuations and returns of growth and technology stocks are discounted deeply when rates go up.
“Its a sour mood. The equity market doesn’t like rising interest rates, too high inflation, a recession and war. So you got four big uncertainties and no one can talk about anything positive right now - that sentiment will have to play out until it ends,” said Barry Schwartz, portfolio manager at Baskin Financial Services.
“It’s just the velocity of the moves in the treasury markets and the fact that there’s still no continued resolution in Russia, the markets are now starting to price in much slower growth going forward.”
Artillery pounded key cities in Ukraine, as its president urged the West to act decisively in imposing new and tougher sanctions being readied against Russia. Separately, the Kremlin said peace talks with Kyiv were not progressing as rapidly or energetically as it would like.
The financials sector fell 0.7% with Bank of Nova Scotia and Toronto-Dominion Bank among the most heavily traded shares. The industrials sector slid 1.5%.
Highlights
On the TSX, 68 issues were higher, while 170 issues declined for a 2.50-to-1 ratio to the downside, with 52.94 million shares traded.
The largest percentage gainer on the TSX was Tilray Inc , which jumped 10.3% after cannabis producer reported a third-quarter profit vs year-earlier loss.
Shopify Inc fell 8.9%, the most on the TSX, followed by software firm Lightspeed Commerce, down 7.9%.
The TSX posted seven new 52-week highs and two new lows.
Across all Canadian issues there were 19 new 52-week highs and 59 new lows, with total volume of 92.73 million shares.
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