By Shashwat Chauhan
(Reuters) – Canada’s main stock index slumped to a more than one-month low on Thursday, with technology and commodity-linked stocks dragging the resources-heavy index as hawkish Federal Reserve commentary dampened risk sentiment.
At 10:13 a.m. ET (1513 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 295.24 points, or 1.48%, at 19,596.41.
Fed Chair Jerome Powell said on Wednesday that the Fed will deliver more interest rate hikes next year, quashing hopes of a softer stance on monetary policy from the central bank which had lifted Wall Street and the TSX off their October lows.
“Clearly, Powell is erring on the side of wanting to ensure that price stability gets back around 2%-3% inflation level and he’s willing to sacrifice some level of economic growth in order to do that,” said Mike Archibald, vice-president and portfolio manager at AGF Investments Inc.
“The Federal Reserve is really focused on ensuring that they do not make a policy mistake such as happened several decades ago where they raised rates aggressively.”
All sectors declined, led by materials, which sank 2.2% to an about two-week low as gold prices toppled against a stronger dollar. [GOL/]
Heavyweight financials shed 0.9%, hitting their lowest since early November, while energy stocks fell 1.9% and were on track for a second straight session of declines.
The TSX’s decline of 7.4% year-to-date has outperformed the benchmark S&P 500 index’s 17.6% drop.
Meanwhile, Canadian housing starts edged lower in November compared with the previous month as a drop in single-detached urban starts offset groundbreaking in multiple unit urban homes, data from the national housing agency showed on Thursday.
Canadian home sales fell 3.3% in November from October, as per data from the Canadian Real Estate Association.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Anil D’Silva and Maju Samuel)
