Canada’s main stock index extended losses to a fifth straight session on Wednesday, dragged by energy stocks, while U.S. inflation data fanned expectations of aggressive rate hikes in the world’s largest economy.
By 10:07 a.m. ET (1407 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was 0.2% lower at 18,180.4, after hitting its lowest since June.
The energy sector dropped 1.4%, in tandem with oil prices struck by a gloomy economic outlook and a strong dollar that outweighed supply concerns stemming from last week’s OPEC+ cut to its production target.
Wall Street also struggled after data showed U.S. producer prices increased more than expected in September, suggesting inflation could remain uncomfortably high for a while. The focus is now on minutes from the September Federal Open Market Committee meeting, which will be released later in the day.
“Investors are reacting to a stronger-than-expected U.S. PPI report, which is seen as a forward-looking measure of inflation,” said Brandon Michael, senior analyst at ABC Funds in Toronto.
Canadian inflation data for September is due next week, with investors pricing in a 97% probability of a 50 basis point rate hike by the Bank of Canada when it meets on Oct. 26.
“The Bank of Canada is going to follow the Federal Reserve. It doesn’t help that they have to act first, but investors are expecting another super-sized rate hike,” said Michael.
Among the day’s big movers, Cameco Corp slumped 14.5% after the company and Brookfield Renewable Partners said they would acquire nuclear power plant equipment maker Westinghouse Electric in a $7.9 billion deal including debt.
Comments
Comments are closed.