By Ketki Saxena
Investing.com -- At midday in Toronto, the S&P?TSX Composite Index was at 18,646.66 points, down 0.17% in the day’s trading as Canadian equities reacted to an outsized 100 basis point hike from the Bank of Canada.
In a surprise move, the Canadian central bank raised its policy rate a full percentage point to 2.50%. The bank also significantly increased its near-term inflation forecasts, and slashed its growth forecasts for 2022 and 2023.
Higher interest rates are aimed at cooling demand throughout the economy. Investors worry that rising rates may trigger a recession as liquidity drains from markets, and cause risk assets to bottom out.
North American equities also continued to be pressured by Hot U.S. inflation data, which puts pressure on the U.S. federal reserve to also raise rates by an outsized amount.
The continuing slide in crude - as worries of rate-hike-driven demand destruction amp up - also weighed on the commodity-heavy Canadian index. Despite tight supply, crude also continues to be pressured by reports of likely new mass lockdowns in China, the world’s second-largest importer of crude. Crude was further pressured by news of U.S. oil inventory builds - the largest since January.
Heavyweight materials helped cap further losses on the TSX today, tracking gains in gold as investors seek out an inflation-hedge.
Seabridge Gold (TSX:SEA) (+13.74%), Fortuna Silver (TSX:FVI) (+6.63%), Endeavour Silver (TSX:EDR) (+5.49%), and New Gold (+5.43%) were today’s biggest gainers. Sleep Country Canada Holdings Inc (TSX:ZZZ)(+5.74%) was also amongst today’s top gainers.
Ritchie Bros Auctioneers (TSX:RBA)(-7.59%), Toromont Industries Ltd . (TSX:TIH) (-6.06%), ATS Automation Tooling Systems Inc. (TSX:ATA) (-4.55%), Trisura (TSX:TSU) (-4.44%), and Dye and Durham (TSX:DND) (-4.15%) were the biggest losers on the TSX so far today.