Canada’s top share index fell on Friday, with technology stocks plunging to a two-year low as worries about aggressive interest rate hikes gripped global markets despite weaker-than-expected domestic jobs data.
By 10:02 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index had fallen 1.2% to 20,449.4. The index was set for a sixth consecutive week of declines.
Rate-sensitive technology stocks fell 3.7% to hit their lowest since May 2020, tracking Wall Street peers, after a strong U.S. jobs data fueled concerns the Federal Reserve may have to deliver bigger rate hikes to tame surging inflation.
Statistics Canada data showed the Canadian economy added far fewer jobs than expected in April but the unemployment rate inched down to a new record low of 5.2%, setting the scene for another oversized rate hike by the central bank.
“Despite the disappointing report, we do not see any implications for the near-term policy outlook,” Andrew Kelvin, chief Canada strategist at TD Securities said in a note.
“The Canadian labour market has been on a remarkable streak, and the Bank of Canada will not place too much weight on any single report. However, the softer hours worked are more concerning, and will pour some cold water on Q2 GDP tracking.”
The Canadian dollar weakened 0.5% to trade at 1.289 per dollar.
Overall, energy stocks fell 1.3% even as prices of oil, one of Canada’s top exports, remained steady as impending European Union sanctions on Russian oil raised the prospect of tighter supply.
Enbridge Inc gained 0.3% after reporting a 4.34% rise in first-quarter profit, as a surge in demand for oil and gas boosted the pipeline operator’s shipment volumes.
E-commerce company Shopify Inc tumbled 10%, adding to a 14.3% slump in the previous session after it delivered a big miss on profit.
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