Canada’s main stock index inched lower on Tuesday, pressured by energy and mining stocks on the back of weaker commodities, while rising U.S. bond yields kept investors on the edge.
At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 13.23 points, or 0.06%, at 21,865.18 and set to snap its three-day winning streak.
The energy sector dropped 1.1% after oil prices slipped in volatile trading on Tuesday as investors weighed demand concerns against tight global supplies.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.2% as bullion prices were pressured by a stronger dollar.
Miners Capstone Copper Corp and Endeavour Silver Corp fell about 5% and 3%, respectively, and were the biggest decliners on the index.
“I think investors are cautious, certainly we’ve had a big move in U.S. bond yields… that’s definitely going to weigh on the commodity prices and act as a bit of a headwind for them,” said Gregory Taylor, portfolio manager at Purpose Investments.
U.S. Treasury yields continued to march to fresh three-year highs on Tuesday and 30-year yields tapped the 3% level as investors prepared for the Federal Reserve to aggressively raise rates as it tries to stem soaring inflation.
On the other hand, technology shares gained 0.5% and the financials sector up 0.3%.
While most stock markets have been rattled by a surge in inflation and a possible economic slowdown, the TSX’s exposure to commodities cushioned the impact and helped the index gain about 3% this year.
On the economic front, Canada’s average home price fell 2.5% in March from February and sales dropped 5.4%, as the red hot housing market showed signs of cooling off, according to data from the Canadian Real Estate Association.
Highlights
The TSX posted 17 new 52-week highs and three new lows.
Across all Canadian issues there were 54 new 52-week highs and 62 new lows, with total volume of 24.55 million shares.
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