Canada’s main stock index fell on Monday, as fears of fresh COVID-19 curbs in China dented oil prices, while technology shares fell amid growing fears of a potential economic slowdown due to looming interest rate hikes.
At 10:14 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 134.43 points, or 0.71%, at 18,888.43.
Rate-sensitive technology shares fell 2.9%, with Constellation Software falling 1.4%.
“This week, the market will be looking towards the Bank of Canada,” said Philip Petursson, chief investment strategist at Manulife Investment Management.
“It is almost a foregone conclusion that they are going to raise rates by 75 basis points but what the market is going to be paying attention to is how they position going forward.”
Weighing on the resource-heavy index, the energy sector fell 2.0% as crude prices declined in volatile trade after China’s commercial hub of Shanghai braced for another mass testing campaign and multiple other cities adopted COVID-19 curbs, raising fears about demand.
“We just have a slower economic growth not only in North America, but around the world and that’s starting to weigh on commodity prices,” said Petursson.
The Toronto Stock Exchange’s S&P/TSX composite index ended 0.9% higher last week even as investors weighed prospects of a global recession and the domestic jobs data supported expectations for an outsized interest rate hike this week by the Bank of Canada.
Globally, investors braced for U.S. inflation data later this week that could force another super-sized interest rate hike in the world’s largest economy.
Among individual companies, Yamana Gold rose 1.3% after South Africa’s Gold Fields promised higher dividends and a Toronto Stock Exchange (TSX) listing to sweeten its proposed takeover.
Rogers Communications fell 2.7% after Friday’s massive outage highlighted the perils of Canada’s effective telecom monopoly and sparked a backlash against its industry dominance.
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