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Canada’s main stock index looked to break a seven-day winning streak on Tuesday, as prospects of aggressive monetary tightening by central banks stoked concerns of a global economic slowdown.

Record inflation in the eurozone and hawkish comments from a U.S. Federal Reserve governor have raised bets that central banks may have to tighten monetary policy faster or more than signaled, leaving investors concerned about the hit to economic growth.

Bank of Canada is seen hiking its overnight rate by 50 basis points to 1.5% on Wednesday to tame soaring inflation, which hit over a three-decade high in April.

Broad-based losses saw the Toronto Stock Exchange’s S&P/TSX composite index slip 212.29 points, or 1.01%, to 20,707.11, after adding 4% over the last seven sessions.

“The U.S. Federal Reserve going to have to raise interest rates more than the market anticipates to bring inflation down. That would be a negative,” said Bill Harris, partner and portfolio manager at Avenue Investment Management in Toronto.

“Earnings are really going to be impacted into the fall, because we are going to have much more of a recessionary economy than what the markets are predicting.”

Data on Tuesday showed Canada’s economic growth was not as robust as expected in the first quarter, dragged by lower export volumes.

Technology and healthcare sectors lost the most, both down more than 2%, while the energy sector dropped 1.1% despite a rally in oil prices.

Highlights

The largest percentage gainer on the TSX was Yamana Gold Inc, which jumped 4.4% after South Africa’s Gold Fields Ltd’s made a $6.7 billion offer for the gold miner.

Cenovus Energy Inc rose up to 1.6% after it announced that the West White Rose oilfield project offshore Newfoundland and Labrador in Canada will restart in 2023. It soon gave up gains, caught up in the broader declines.

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