Oil stocks drag TSX lower amid global slowdown worries
2022.10.12 11:12
© Reuters. The Toronto Stock Exchange sign is seen in Toronto, Ontario, Canada July 6, 2017. REUTERS/Chris Helgren
By Johann M Cherian and Shashwat Chauhan
(Reuters) – 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. [O/R]
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. [ECI][.N]
“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. [IRPR]
“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 (NYSE:) Corp slumped 14.5% after the company and Brookfield Renewable Partners (NYSE:) said they would acquire nuclear power plant equipment maker Westinghouse Electric in a $7.9 billion deal including debt. [L4N31C3MA]
($1= C$1.3)
