S&P/TSX Composite Index Falls Nearly 200 Points, U.S. Equity Markets Fall

Canada’s main stock index closed down nearly 1% on Tuesday in a broad base decline, similar to losses in the US stock market one day before the US Federal Reserve’s latest interest rate decision .

The S&P/TSX Composite Index fell 193.69 points to close at 19,368.69 after trading low to 19,246.77 in mid-afternoon trading.

The fall in Toronto’s markets came even as Statistics Canada’s August inflation data came in below analyst expectations, slightly softening expectations of the Bank of Canada’s next rate hike. But Canadian data is overshadowed by what’s happening in other markets, said Anish Chopra, managing director of Portfolio Management Corporation.

“What’s happening in the US market and in Europe is really triggering a lot of action. We’re still seeing high inflation across Europe. If you look at the US, investors are waiting for the Fed’s decision. ”

Chopra said the Fed had long been expected to raise its policy rate by three-quarters of a percentage point on Wednesday, but it is now more likely that it will raise it further after last week’s higher-than-expected U.S. inflation data.

“As more data on inflation increases, the odds of a 100 basis point rise tomorrow are increasing.”

Expectations of an imminent rate hike put pressure on a range of sectors as well as key commodities such as oil, gold and copper on Tuesday.

The losses included declines in growth-oriented stocks like Shopify Inc., which fell 5.2%, the S&P/TSX Information Technology Index fell 2.2%, the base metals index fell 1.6%, financial indexes has fallen. 0.9 percent.

In New York, the Dow Jones Industrial Average fell 313.45 points to close at 30,706.23. The S&P 500 Index was down 43.96 points to 3,855.93 and the Nasdaq Composite Index was down 109.97 points to 11,425.05.

Canada’s inflation rate last month was 7.0%, below consensus expectations of 7.3%, slightly lowering expectations for a 0.5 percentage point rate hike next month, Chopra said.

Easing expectations of a Canadian rate hike, combined with rising expectations in the US, helped push Looney down further, trading at 74.93 cents compared to 75.26 cents on Monday.

“There is an issue that the Bank of Canada may delay rate hikes, but the US will continue to raise rates, which is putting pressure on the Canadian dollar,” Chopra said.

The Looney has fallen from about 78 cents in mid-August on both interest rate expectations and falling commodity prices.

On Tuesday, November crude oil contracts fell $1.42 to $83.94 per barrel, while October natural gas contracts fell 3.5 cents to $7.72 per mmBTU.

The December gold contract fell $7.10 to $1,671.10 per ounce, while the December copper contract fell 1 cent to $3.50 per pound.

This report by the Canadian Press was first published on September 20, 2022.

S&P/TSX Composite Index Falls Nearly 200 Points, U.S. Equity Markets Fall

Source link S&P/TSX Composite Index Falls Nearly 200 Points, U.S. Equity Markets Fall

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