Canada’s main stock index fell on Wednesday as a decline in commodity prices dragged energy and materials stocks, while investors stayed on the sidelines ahead of a widely expected interest rate hike by the U.S. Federal Reserve.
At 10:11 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 14.14 points, or 0.07%, at 20,537.39.
Energy sector dropped 0.7% as crude prices declined ahead of Fed decision and a possible increase in U.S. crude supplies.
Metal prices also slipped on fears of weak demand from top consumer China after the country did not outline any specific plans to back up its pledge of providing economic stimulus it announced on Monday.
Material stocks fell 0.6%.
The U.S. central bank is expected to raise interest rates by a quarter of a percentage point on Wednesday, pushing the borrowing cost to its highest since the global financial crisis.
“There is a bit of a lopsided risk as we go into the Fed meeting this afternoon that they may sound hawkish,” said Brian Madden, chief investment officer at First Avenue Investment Counsel.
Supporting the view, Michael Gregory, deputy chief economist at BMO Capital Markets, said in a note that “in the press conference, we expect Chair Powell will still sound more hawkish than dovish.”
Traders will also closely monitor Bank of Canada’s monetary policy deliberations held before it raised interest rates on July 12, due later in the day, for more clues on central bank’s interest rate path.
Information technology (IT) sector, lost 1.3% as shares of CGI Inc fell 3.9% after the Canadian-based IT company reported quarterly results.
IT stocks also mirrored weakness in their U.S. counterparts as investors assessed mixed earnings from Microsoft and Alphabet.
Canadian shares of Rogers Communications rose more than 3% after the company raised its annual forecasts for adjusted core earnings and free cash flow.
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