Canada’s main stock index was dragged lower by technology and commodity-linked stocks on Monday as investors fretted over the prospects of a global recession next year after major central banks stuck to their hawkish stance last week.
At 10:24 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 25.49 points, or 0.13%, at 19,417.79, hovering near a more than one-month low hit on Friday.
Toronto shares shed 2.5% last week, its second straight week of losses as major central banks such as the Federal Reserve signaled interest rate hikes were far from over as they try to bring inflation back to its target level.
“The current focus of investors has shifted from concerns about inflation and rising interest rates to an impending economic slowdown and a potential recession in the coming year”, said Brandon Michael, a senior analyst at ABC Funds.
“Financial markets continue to process hawkish commentary from policymakers.”
Commodity-linked stocks lost steam, with the energy sector reversing early gains and falling 0.3%.
Materials, which includes precious and base metal miners, shed 0.8%.
Tech stocks fell 0.7%, with Shopify amongst the biggest drags, down 1.3%.
The benchmark Canadian index has outperformed the U.S. S&P 500 index so far this year, losing 8.6% versus a 19.5% drop in the U.S. benchmark.
Meanwhile, the Bank of Canada governor told the Globe and Mail that the central bank missed the mark on rising inflation but a turnaround is near.
Among individual stocks, Dye & Durham Limited scaled the top of the index, gaining 16.5% after the software maker said it is significantly expanding its legal practice management capabilities with the addition of litigation workflow software.
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