By Ketki Saxena
Investing.com -- At 1:30 p.m in Toronto, the S&P/TSX Composite Index was at 18,270.16 points, down 1.85% in the day’s trading as Canadian equities remained pressured by the prospect of quickly evaporating liquidity following the Bank of Canada’s surprise 100-basis-point interest hike yesterday.
The Canadian index was also pressured by rate-hike expectations from the Federal Reserve following yesterday’s red-hot consumer price index, and today’s Producer Price Index, which also rose more than expected.
A sharp decline in crude and broad-based losses in metals also weighed on the commodity-heavy Canadian benchmark at midday.
All TSX sectors barring industrials and healthcare were in the red at midday, with the Canadian index most pressured by a decline in the heavyweight materials (-3.14%), energy (-3.45%), and financials (-3.70%).
Financials, typically a beneficiary of a rising rate environment meanwhile tracked U.S. bank stocks lower following downbeat earningsa and outlook from JPMorgan Chase & Co (NYSE:JPM) and Morgan Stanley (NYSE:MS) reinforced worries of a sharp economic downturn caused by aggressive monetary policy tightening.
Energy was weighed by the continued slide in oil prices as investors worry about slowing economic growth, and an outsized Fed rate hike driving demand destruction. Oil is also being pressured by rising Covid cases in China, and the prospect of lower demand from the world’s second-largest consumer of crude.
Materials meanwhile were pressured by gold as U.S. yields rose and the dollar strengthened, and broad-based losses in base metals on worries of declining industrial output as the global economy cools and China looks set for another possible lockdown.
Resource stocks were the biggest losers on the TSX today, including new gold (-8.65%), First Quantum (-8.11%), Equinox Gold (TSX:EQX) (-7.10%), Methanex (-6.91%), and Capstone Mining (-6.83%).
Pot stocks meanwhile were the top performers on the Canadian index so far today after Tilray’s consensus rating was upgraded to “hold” from 12 analysts covering the stock. Tilray (TSX:TLRY) (+14.15%), Aurora Cannabis (TSX:ACB) (+9.41%), Canopy Growth (TSX:WEED) (+7.19%), and Cronos (+3.89%). Ritchie Bros Auctioneers (+10.85%) was also a top gainer today.