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CANADA STOCKS-TSX tracks Wall Street losses after surprise spike in U.S. inflation

CANADA STOCKS-TSX tracks Wall Street losses after surprise spike in U.S. inflation

Reuters · 09/13/2022 10:42
CANADA STOCKS-TSX tracks Wall Street losses after surprise spike in U.S. inflation

Updates with analyst comment, updates prices

By Aniruddha Ghosh and Johann M Cherian

- Canada's main stock index on Tuesday tracked losses in Wall Street after data showing an unexpected rise in monthly U.S. consumer prices in August bolstered bets for another aggressive rate hike from the Federal Reserve.

At 10:14 a.m. ET (14:14 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 193.06 points, or 0.97%, at 19,794.17, led by a 3.2% fall in technology and healthcare stocks. Toronto stocks were on pace to end a four-day winning streak if losses hold or deepen.

The heavyweight energy sector .SPTTEN was unchanged as oil prices eased, while the materials sector .GSPTTMT, which includes precious and base metals miners and fertilizer companies, lost 0.7% as gold prices fell more than 1% due to a stronger dollar.GOL/ MET/L O/R

Monthly U.S consumer prices unexpectedly rose in August as declining gasoline prices were offset by gains in the costs of rent and food, giving cover for the Federal Reserve to deliver another hefty interest rate increase Wednesday.

"The Canadian market is down less than the U.S. so far and that's unusual on days like this because it's the energy prices that are helping cushion the Canadian market a little bit. Canada might hopefully manage to go down less than some of its peers," Colin Cieszynski, chief market strategist at SIA Wealth Management said.

"We'll most likely see central banks in the U.S. and Canada under pressure to continue raising interest rates. That is going to be bearish for the housing market in terms of sales."

The rate-sensitive financials sector .SPTTFS slipped 1.4%, tracking U.S. peers that weighed down the country's key benchmarks..N

Money markets see an 81% chance of a 75-basis-point increase in rates and 19% chance of a 100 bps hike by the Fed at its Sept. 20-21 meeting. FEDWATCH

The Bank of Canada already raised its benchmark interest rate by 75 basis points to a 14-year high of 3.25% earlier this month.



(Reporting by Aniruddha Ghosh and Johann Cherian in Bengaluru; Editing by Vinay Dwivedi)

((Aniruddha.Ghosh@thomsonreuters.com; 91 83 83 81 2416;))