Economy 31 minutes ago (Oct 11, 2022 10:48AM ET)
© Reuters. The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren
By Johann M Cherian and Shashwat Chauhan
(Reuters) – Canada’s main stock index slid more than 2% on Tuesday, tracking a fall in global markets as worries about a global recession unnerved investors returning from a long weekend, with energy, technology and financial stocks among to big losers.
At 10:10 a.m. ET (14:10 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 405.21 points, or 2.18%, at 18,177.92., its lowest level since July 14.
“I think we are seeing the rate hikes really in full effect now,” said Allan Small, senior investment adviser at the Allan Small Financial Group with iA Private Wealth.
“The fear is that because the rate hikes have a lagging effect on the economy, we will not feel the full effect of these rate hikes until perhaps 3-6 months down the road.”
Adding to the recessionary chorus, the IMF cut its global growth forecast for 2023 amid pressures from the war in Ukraine, high inflation and higher interest rates.
Bank of Canada Governor Tiff Macklem said on Sunday that there was scope to slow the economy based on a large number of job vacancies.
The BoC has raised its benchmark interest rate by 300 basis points since March, one of its steepest and fastest tightening cycles ever, with markets pricing in another 50 bps increase on Oct. 26.
China, the world’s largest consumer, stepped up COVID-19 restrictions after a flare-up in infections, pushing oil, gold and other metals prices lower on worries about consequent demand hit. [O/R] [MET/L] [GOL/]
The energy sector dropped 4.3% while the materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.6%. Financials dipped 2.2%.
Healthcare sector, which included cannabis companies, were the top losers, down 4.9%.
Rate-sensitive tech stocks slipped 2.8%, under pressure from Canadian government bond yield which hit 3.443%, its highest since June 28.