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Toronto Market Posts 5-Week Low on Interest Rate Jitters | Reuters

Canada's main stock index closed slightly lower on Wednesday, trading at a five-week low, as minutes from the Federal Reserve's latest meeting left the door open to further rate hikes and after data this week showed a slowdown in China.

By Ben Jang
Portfolio Manager, Head of Fixed Income
August 16, 2023|2 min read
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By Fergal Smith in Toronto and Siddarth S. in Bengaluru;

Aug 16 (Reuters) - Canada's main stock index closed slightly lower on Wednesday, trading at a five-week low, as minutes from the Federal Reserve's latest meeting left the door open to further rate hikes and after data this week showed a slowdown in China.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 0.72 points at 19,899.07, its lowest closing level since July 11.

Wall Street fell after minutes from the Fed's July 25-26 meeting showed most policymakers continued to prioritize the battle against inflation.

"The market continues to be a little bit too sanguine" about the possibility of additional tightening, said Ben Jang, a portfolio manager at Nicola Wealth.

Investors have also been factoring in this week mounting evidence of a slowdown in China.

"There continues to be a persistence of bad news from China," Jang said. "There was a little bit of repricing (of stocks) because of that, particularly in the cyclical sectors."

The Toronto market has a heavy weighting in commodity-linked stocks so it's particularly sensitive to the global economic outlook.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.7% as gold prices fell.

Oil also lost ground, settling nearly 2% lower at $79.38 a barrel. But the energy sector clawed back some of the previous day's decline, rising 0.5%.

Heavily-weighted financials were down 0.2%.

Domestic data showed that housing starts fell 10% in July compared with the previous month, while wholesale trade was down 2.8% in June from May.

Editing by Shweta Agarwal and Daniel Wallis


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