Canada’s main stock index stabilized on Monday after closing at a more than two-week low in the previous session, as a surge in energy stocks offset concerns about the Federal Reserve’s hawkish stance on interest rates.
The Toronto Stock Exchange’s S&P/TSX composite index was down 3.09 points, or 0.02%, at 19,870.2.
The benchmark shed over 1.5% on Friday after Federal Reserve Chief Jerome Powell warned the U.S. central bank will continue to raise rates in a bid to curtail inflation even as that causes pain for households and businesses.
“We believe there is weakness ahead in markets and there is a chance that markets retest those lows that were struck a few months ago,” said Eric Lascelles, chief economist at RBC Global Asset Management.
Canadian stocks rallied over 11% since hitting the lowest point of the year in July but ran into headwinds in the recent weeks as fears of aggressive steps by central banks to tame inflation came to the fore. The index is down 6.4% so far this year.
Investors ramped up Canadian rate hike bets, with markets pricing in a greater chance of 75 basis point hikes from the Bank of Canada in September.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.8 percent as gold futures rose 0.2 percent to $1,739.1 an ounce.
However, the energy sector climbed 2.0 percent as U.S. crude prices were up 3.1 percent a barrel, while Brent crude added 2.6 percent.
The healthcare sector, which features cannabis stocks, rose 1.5% on the back of a 6% surge in shares of Canopy Growth.
Comments
Comments are closed for this article.