S & P / TSX composite declines for first week since early May due to rising interest rate outlook – .

S & P / TSX composite declines for first week since early May due to rising interest rate outlook – .

TORONTO – The main Canadian stock index had its first losing week since early May and fell below 20,000 points for the first time in two weeks as the prospect of early interest rate hikes rocked investors.

The S & P / TSX Composite Index closed 144.45 points lower at 19,999.59. Despite setting new records earlier in the week, the Toronto market finished lower for the first time in five weeks.

In New York, the Dow Jones Industrial Average was down 533.37 points or 1.6% to 33,290.08. The S&P 500 Index lost 55.41 points to 4,166.45, while the Nasdaq Composite lost 130.97 points to 14,030.38.

“I think some of the talk from the Fed is really what’s driving things over the last couple of days,” said Allan Small, senior investment advisor at IA Private Wealth.

The US central bank surprised markets by announcing that interest rates would rise earlier than expected and that two quarter-point hikes were likely in 2023.

And then St. Louis Fed Chairman James Bullard added to market concerns by saying on Friday that he expects rate hikes to start happening next year.

Canadian markets outperformed their US counterparts as oil prices continued to rise, Small said.

Meanwhile, the Dow Jones experienced its worst week since October after recording its fifth consecutive day of losses.

Dips are actually healthy to “clean up some of the excess buyers, the suds if you will, and hopefully start all over again on Monday,” said Small, who advised customers to buy on the downside. .

Stock markets quickly recovered from last year’s collapse to record highs.

Even after recent losses, the TSX is 78% above its March 2020 low and up 14.7% so far in 2021.

Eight of the TSX’s top 11 sectors were down on Friday in a widespread decline, including healthcare, consumer discretionary, energy, materials and industrials.

Energy fell 1.1 percent despite rising crude oil prices, with shares of Whitecap Resources Inc. down 2.4 percent, Suncor Energy Inc. down 1.9 percent and Crescent Point Energy Corp. down 1.7 percent.

The August crude oil contract rose 51 cents to US $ 71.29 per barrel and the July natural gas contract fell 3.8 cents to nearly US $ 3.22 per mmBTU.

Crude prices rose after OPEC said it expected weak supply growth this year in the United States.

Nonetheless, Small expects producers to try to increase production as long as prices remain high.

Consumer Discretionary was pushed down by a 2.5% drop in Magna International Inc. shares while Healthcare was hit by a 4.3% drop in Organigram Holdings Inc. and 3%. , 4% by Tilray Inc.

Materials also fell as the prices of metals and other commodities that thrived on a strong loonie continued to struggle.

The August gold contract was down US $ 5.80 to US $ 1,769 an ounce and the July copper contract was down 2.1 cents to nearly US $ 4.16 the pound.

Shares of New Gold Inc were down 4.1%, followed by Equinox Gold Corp. at 3.8%.

The Canadian dollar traded at 80.52 cents US for a decline of 1.8 cents on the week and compared to 81.03 cents US on Thursday.

The heavyweight financial sector fell 0.9%, while Scotiabank lost 1.8%.

Technology continued to benefit from the transition to growth with Lightspeed POS Inc. up 4% and Shopify Inc. up 1.7%.

This report by The Canadian Press was first published on June 18, 2021.


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