Profit-taking weighs on TSX ahead of BoC rate decision

Image Source: Reuters


By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Monday, including declines for resource and technology shares, as investors took stock of the market's recent rally and awaited a Bank of Canada interest rate decision later this week.

The Toronto Stock Exchange's S&P/TSX composite index ended down 243.40 points, or 1.2%, at 20,242.26, its biggest decline since Nov. 9.

It was the index's second day of declines after last Thursday posting its highest closing level in nearly six months.

"I would view it largely as profit-taking based on overbought conditions," said Joseph Abramson, co-chief investment officer at Northland Wealth Management.

"We are still in that two steps forward, one step backward market, where we're getting to the point where we're discounting a peak in interest rates and discounting a recession."

Wall Street's major indexes fell more heavily as investors fretted that better-than-expected service-sector activity could point to the Federal Reserve hiking interest rates for longer.

The Bank of Canada has also been raising interest rates. Money markets are betting on a 25-basis-point increase when the central bank meets to set policy on Wednesday but a slim majority of economists in a Reuters poll expect a larger move.

The Toronto market's energy group fell 2.9% as the price of oil settled 3.8% lower at $76.93 a barrel.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 1.6% as gold and copper prices fell.

Technology was also a drag, falling 2.8%, while heavily-weighted financials ended nearly 1% lower.

(Reporting by Fergal Smith; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Alistair Bell)



 


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