Canada's main stock index opened lower on Wednesday, dragged down by materials and technology stocks after a hot inflation report in the United States pushed back hopes of a June interest rate cut by the Federal Reserve in the run-up to the Bank of Canada's monetary policy decision.
The TSX Composite capsized 216.84 points, or 1%, to open the mid-week session at 22,144.94.
The Canadian dollar handed over 0.4 cents at 73.27 cents U.S.
National Bank of Canada initiated coverage of Hammond Power Solutions with a "sector perform" rating. Hammond shares fell $2.83, or 1.8%, to $154.52.
The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5.25% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.
Meantime, money market participants are pricing in a little over 72% bets of a cut in June.
Also, Statistics Canada reported the total monthly value of building permits in Canada increased 9.3% from January to $11.8 billion in February.
ON BAYSTREET
The TSX Venture Exchange slumped 5.43 points to 582.74.
All but one of the 12 TSX subgroups were negative in the first hour, with utilities and real-estate each tumbling 1.7%, while information technology lost 1.5%.
The lone holdout was in energy, up 0.6%.
ON WALLSTREET
Stocks tanked on Wednesday after March inflation data came in hotter than expected, likely pushing off interest rate cuts by the Federal Reserve that investors have been anticipating.
The 30-stock index plummeted 409.79 points, or 1.1%, to 38,473.88.
The S&P 500 slumped 48.21 points to 5,161.70.
The NASDAQ sank 158.98 points, or 1%, to 16,147.66.
Bank shares, including JPMorgan Chase and industrial shares like Caterpillar, both fell around 1% on worries higher rates will start to suffocate the economy. Once red-hot tech stocks Microsoft and Apple also pulled back more than 1% each.
All sectors in the broad market index were red for the day. Utilities fell more than 3%, leading sector losses for the day. The S&P 500 had been treading water in April in anticipation of this inflation report following a roaring start to the year where the benchmark rallied 10% for its best first quarter gain in five years.
The CPI in March rose 0.4% for the month and 3.5% year-over-year, versus estimates of a 0.3% monthly increase and 3.4% year-over-year, according to economists polled by Dow Jones. Core CPI, which excludes volatile food and energy prices, accelerated 0.4% from the previous month while rising 3.8% from a year ago, compared to estimates for 0.3% and 3.7%, respectively. CPI in April increased at a 3.2% annual pace for all items.
Prices for the 10-year Treasury dropped sharply, raising yields to 4.5% from Tuesday’s 4.36%. Treasury prices and yields move in opposite directions.
Oil prices gained 24 cents to $85.47 U.S. a barrel.
Gold prices docked four dollars to $2,358.40 U.S. an ounce.
