TSX Retreats from Three-Week High Amid Declines in Financials and Shopify
Canada's Main Stock Index Gives Back Recent Gains Amid Inflation Concerns
TORONTO, May 13 (Reuters) - Canada's main stock index, the Toronto Stock Exchange's S&P/TSX Composite index, retreated on Wednesday, weighed by declines in financial and technology shares, following the release of U.S. data that added to evidence of accelerating inflation.
The index ended down 249.30 points, or 0.7%, at 34,041.43, after reaching its highest closing level in three weeks on Tuesday. The decline in the index was largely driven by the technology sector, which fell 1.1% as shares of Shopify Inc lost 4.5% to hit their lowest level since May last year.
The financial sector also contributed to the decline, falling 1.1% as shares of goeasy Ltd ended 5.1% lower after the consumer lender reported a deeper-than-expected loss. The consumer staples sector fell 0.7%, consumer discretionary was down 1.5%, and industrials ended 0.9% lower.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Sector | Change |
|---|---|
| Technology | -1.1% |
| Financials | -1.1% |
| Consumer Staples | -0.7% |
| Consumer Discretionary | -1.5% |
| Industrials | -0.9% |
The decline in the stock market came as U.S. producer prices posted their biggest increase in four years in April, boosted by soaring costs for goods and services. The latest sign of accelerating inflation amid the war with Iran, has investors pricing in two interest rate hikes from the Bank of Canada after the surge in oil prices boosted the inflation outlook.
The gap between Canada's 2-year and 10-year yields has narrowed to about 60 basis points from 85 basis points at the start of the year. Minutes from the central bank's latest meeting showed that policymakers felt they could afford to be patient on moving rates but that the situation might change quickly.
Boyd Group Services Inc, which runs autobody and auto glass repair facilities across North America, slumped nearly 12% after the company missed analysts' expectations for first-quarter sales.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Investors should be cautious of the decline in financial and technology shares due to inflation concerns.
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