Canada’s main stock index fell to nearly a one-year low on Thursday, a day after descending into correction territory, as weakness in mining shares and downbeat earnings from Manulife Financial weighed on sentiment.
At 9:45 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 262.57 points, or 1.32%, at 19,574.68, extending losses for the sixth straight session.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2.3%, tracking weakness in bullion prices and as copper tumbled to a seven-month low.
The financials sector slipped 2%, with Manulife Financial and Sun Life Financial fell 7.9% and 1.9%, respectively, after the insurers on Wednesday reported core earnings fell from a year ago as the COVID-19 pandemic took a toll on their Asian earnings, with Manulife also missing estimates.
The energy sector dropped 1.7% as oil prices slipped nearly 2% on recession fears that dogged global financial markets, outweighing supply concerns and geopolitical tensions in Europe.
“Sentiment in the market looks pretty bearish and fearful this morning. We’re definitely seeing heavy defensive rotation. Commodity prices are getting hammered today,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
On Wednesday, the Canadian benchmark index fell to its lowest level since July 2021, taking its losses since the March 29 closing record high to 10.2%. A correction is confirmed when an index closes 10% or more below its record closing level.
Meanwhile, investor sentiment was also pressured by data showing a rise in U.S. consumer prices index, fueling concerns of further aggressive policy tightening by the Federal Reserve.
Canada’s inflation report for April is due next Wednesday and money markets expect the Bank of Canada to hike rates by half a percentage point for a second straight policy meeting on June 1.
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