Canada’s main stock index fell 1%, extending declines for a second consecutive session on Tuesday, dragged down by rate-sensitive technology stocks after hotter-than-expected inflation data fanned fears that the Bank of Canada (BoC) might raise interest rates further.
The TSX Composite Index lost 229.88 points, or 1.1%, to advance toward noon hour EDT at 20,262.95
The Canadian dollar gained 0.36 cents at 74.50 cents U.S.
Health-care stocks sagged the most heavily, as Bausch Health Companies tumbled $1.05, or 9.3%, to $10.26.
Tech issues were also roughed up, as Shopify ditched $2.90, or 3.6%, to $77.41, while Docebo took a hit of $2.02, or 3.6%, to $54.60.
The federal Liberal government, trailing in the polls amid complaints about the high cost of living, on Monday said it would soon introduce wide-ranging draft legislation designed to help curb inflation.
As well, Prime Minister Justin Trudeau said authorities were “actively pursuing credible allegations” linking New Delhi’s agents to the murder of a Sikh separatist leader, an assertion India quickly dismissed as “absurd”.
On the economic schedule, Statistics Canada said the Consumer Price Index (CPI) rose 4.0% on a year-over-year basis in August, following a 3.3% increase in July. On a seasonally adjusted monthly basis, the CPI rose 0.6% in August.
The TSX Venture Exchange skidded 5.2 points to 585.89.
All 12 TSX subgroups were lower midday, with health-care stocks tailing off 2.9%, information technology, off 2.2%, and gold, dulling in price 1.5%.
Stocks retreated on Tuesday as Wall Street awaited the results of this week’s Federal Reserve policy meeting.
The Dow Jones Industrials collapsed 227.56 points to 34,396.74.
The S&P 500 index sank 27.37 points to 4,426.16.
The NASDAQ index withered 106.25 points to 13,603.98.
Deere, often seen as a barometer of future economic activity, fell more than 2% in the session. The drop came after Evercore ISI downgraded the stock to in-line from outperform due to agricultural production cuts.
Leadership of the striking United Auto Workers union said more workers could be called on to withhold labor if progress is not made by a Friday deadline. Stellantis climbed nearly 2% in Tuesday’s session, while General Motors took on 0.6%, and Ford advanced around 0.3%.
The central bank’s two-day meeting begins on Tuesday. The Fed is not expected to raise rates when announcing its decision Wednesday, with traders pricing in a 99% probability that the central bank skips a hike. Traders are putting just a 29% chance of a hike in November.
The Fed will also offer economic forecasts on Wednesday. Investors will watch for commentary around the path of inflation and future path of interest rates.
Prices for the 10-year Treasury sagged, raising yields to 4.34% from Monday’s 4.31%. Treasury prices and yields move in opposite directions.
Oil prices strengthened $1.39 to $92.87 U.S. a barrel.
Gold prices gained $1.30 to $1,954.70 U.S. an ounce.