Written by Yohan M Cherian and Shashawat Chauhan
(Reuters) – Canada’s main stock index extended losses for a fifth straight session on Wednesday, dragged down by energy stocks, while US inflation data boosted expectations of a rate hike in the world’s largest economy.
By 10:07 AM ET (1407 GMT), the S&P/TSX Composite Index on the Toronto Stock Exchange was down 0.2% at 18,180.4, after hitting its lowest level since June.
The energy sector fell 1.4%, along with oil prices hit by a bleak economic outlook and a strong dollar that overshadowed supply concerns caused by last week’s OPEC+ production target cut. [O/R]
Wall Street also suffered after data showed US producer prices rose more than expected in September, suggesting inflation could remain uncomfortably high for a while. The focus now is on the minutes of the FOMC meeting in September, which will be released later in the day. [ECI][.N]
“Investors are reacting to a stronger-than-expected US Producer Price Index report, which is seen as a forward-looking gauge for inflation,” said Brandon Michael, chief analyst at ABC Funds in Toronto.
Canadian inflation data for September is due next week, with 97% investors anticipating a 50 basis point interest rate hike by the Bank of Canada when it meets on October 26. [IRPR]
“The Bank of Canada will follow the Fed. It doesn’t help that they have to act first, but investors are expecting another big rate hike,” Michael said.
Among today’s top movers, Cameco (NYSE:) Corp. fell 14.5% after the company and Brookfield Renewable Partners (NYSE:) said they would acquire nuclear power plant equipment maker Westinghouse Electric in a $7.9 billion deal including debt. . [L4N31C3MA]
(1 dollar = 1.3 Canadian dollars)