TSX gives back monthly gain as resource shares slide
Reuters
Published May 31, 2022 07:55AM ET
Updated May 31, 2022 04:36PM ET
By Fergal Smith
TORONTO (Reuters) - Canada's main stock snapped its recent winning streak on Tuesday, pressured by a drop in resource shares, as investors grew more nervous that central banks would hike interest rates aggressively to tame inflation.
The Toronto Stock Exchange's S&P/TSX composite index ended down 190.06 points, or 0.9%, at 20,729.34, after seven straight days of gains. For the month of May, it dipped 0.2%, following a 5.2% slump in April.
The S&P 500 also fell on Tuesday as volatile trading in oil prices kept soaring inflation in focus and investors reacted to hawkish comments from a Federal Reserve official.
"The U.S. Federal Reserve is going to have to raise interest rates more than the market anticipates to bring inflation down," said Bill Harris, a portfolio manager at Avenue Investment Management in Toronto.
"Earnings are really going to be impacted into the fall, because we are going to have much more of a recessionary economy than what the markets are predicting."
Data showed that Canada's economic growth was not as robust as expected in the first quarter, hindered by lower export volumes.
Money markets expect the Bank of Canada to raise interest rates by half a percentage point for a second straight time at a policy decision on Wednesday.
The energy sector fell 2.8%, giving back some of its recent gains. Oil settled 0.4% lower at $114.67 a barrel after a report that some producers were exploring the idea of suspending Russia's participation in the OPEC+ production deal. Earlier, crude had approached the $120 threshold.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 1.4% as gold prices fell. Gold was down 1% at about $1,837 per ounce.
Technology also lost ground, falling 1.5%, and industrials ended 0.9% lower.
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Written By: Reuters
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