S&P/TSX composite closes lower, US equity markets also fall

TORONTO-

Canada’s main stock index closed Wednesday, along with US stock markets, as investors continue to digest the potential for higher interest rates.

The composite S&P/TSX index started but ended at 69.41 points at 21,205.16 as financial, technical and energy stocks fell.

“Most stocks across the board have fallen after starting the day pretty strong,” said Michael Currie, vice president and investment advisor at TD Wealth.

The index fell despite strong gains in commodities, including February’s gold contract that closed $30.80 at $1,843.20 an ounce and oil which hit a seven-year high when the crude oil contract rose 97 cents to $97 in March. 85.80 per barrel.

“I’m a little shocked that Toronto is down just because it was such a good day for gold and oil in general,” said Currie.

He said oil news on the day was positive, including the price hikes and the International Energy Agency forecasting higher demand, but the decline in energy supplies may have been just profit-taking after the TSX energy index hit 17 percent so far. had risen this year.

Materials, however, were a bright spot, with the index rising more than four percent as both gold and copper prices rose. Big winners have included Barrick Gold Corp. rose 8.52 percent, Yamana Gold rose 8.19 percent and Kinross Gold Corp. increased by 7.86 percent.

Gold prices were likely pushed up by a decline in bond yields, Currie said.

“The 10-year yields in the US for several days have had a really good start and have had a small pullback today, so that certainly helped gold.”

In New York, the Dow Jones industrial average closed 339.82 points at 35,028.65. The S&P 500 index fell 44.35 points to 4,532.76, while the Nasdaq composite fell 166.64 points to 14,340.25 points.

The Canadian dollar traded for 80.05 US cents, compared to 79.81 US cents on Tuesday, a day when Statistics Canada reported an annual inflation rate of 4.8% in December, reaching its highest level in 30 years.

High inflation has led economists to predict that the Bank of Canada could start raising interest rates as early as next week, with more hikes expected this year.

The February natural gas contract fell 25 cents to $4.03 per mmBTU, and the March copper contract rose nine cents to $4.47 per pound.

This report from The Canadian Press was first published on January 19, 2022.