Wednesday, 11 March 2015 02:42
TORONTO: Canada’s main stock index dropped to its lowest in five weeks on Tuesday, dragged down by worries that the U.S. Federal Reserve could raise interest rates sooner than previously expected.
A strong U.S. dollar and mixed economic data from China put pressure on oil prices, weighing on shares of energy producers.
Since the release of a bullish U.S. jobs report on Friday, investors have been speculating that the Fed might accelerate its plans to raise rates.
Recent comments from a Fed official calling for the U.S. central bank to swiftly end its easy monetary policy and raise interest rates only heightened those concerns.
The benchmark TSX declined sharply for a third straight session. It has shed nearly 4 percent since the start of the month.
“We’ve seen this playbook before, where investors get spooked by the prospect of the Fed advancing its rate hike timetable,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
“Investors are also looking at the strength of the U.S. dollar, which could play a big part in market moves in the months ahead.”
The Toronto Stock Exchange’s S&P/TSX composite index closed down 212.73 points, or 1.43 percent, at 14,641.76. Nine of the 10 main sectors on the index were in the red.
Financials, the index’s most heavily weighted sector, slipped 1.7 percent. Royal Bank of Canada gave back 1.6 percent to close at C$ 75.69, and Toronto Dominion Bank lost 1.9 percent to finish at C$ 53.20.
Shares of energy producers were down 1.4 percent, with the prices of Brent and U.S. crude oil trading lower. Canadian Natural Resources Ltd declined 0.7 percent to C$ 36.39, and Suncor Energy Inc fell 1.1 percent to C$ 35.54.
Copyright Reuters, 2015
