Canada’s main stock index fell on Tuesday to a two-week low as lower oil prices weighed on resource shares and investors braced for another interest rate hike by the Bank of Canada.
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended down 252.09 points, or 1.25%, at 19,990.17, its lowest closing level since Nov. 21.
“We are looking at a pretty broadbased decline,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “It says to me it is more related to general equity market weakness and perhaps some concern that the (Canadian) central bank is going to remain relatively hawkish.”
Wall Street benchmarks also fell as uncertainty around the direction of Federal Reserve rate hikes and further talk of a looming recession weighed on skittish investors.
Money markets are betting on a 25-basis-point increase when the BoC meets to set policy on Wednesday but a slim majority of economists in a Reuters poll expect a larger move.
All 10 of the TSX’s major sectors lost ground, including a decline of 3.5% for the energy sector. That matched the decline for U.S. crude prices , which settled at $74.25 a barrel, as global demand concerns weighed.
Shares of Cenovus Energy Inc (CVE.TO) were down 3.6% as the company forecast higher capital expenditure and production in 2023.
Heavily weighted financials fell 0.9%, while technology ended 2.1% lower.
Pot stocks Canopy Growth (WEED.TO) and Tilray Brands lost 16.4% and 12.7%, respectively, after rallying for five straight sessions on expectations of a positive update on a pivotal U.S. banking bill that could provide further legitimacy to the sector.