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Canadian shares hit 14-month low, loonie dips on recession worries


Jun 16, 2022

The Artwork Deco facade of the unique Toronto Inventory Trade constructing is seen on Bay Road in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren

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TORONTO, June 16 (Reuters) – Canada’s principal inventory index slumped on Thursday to its lowest degree in 14 months and its forex weakened as buyers grew extra anxious that aggressive central financial institution rate of interest hikes would set off a recession, weighing on company earnings.

The Toronto Inventory Trade’s S&P/TSX composite index (.GSPTSE) was down 3.3% at 18,970.70, its lowest degree since April 2021.

The Canadian greenback was buying and selling 0.3% decrease at 1.2925 to the buck, or 77.37 U.S. cents, after relating Wednesday its weakest intraday degree in a couple of month at 1.2995. learn extra

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U.S. inventory indexes additionally tumbled on Thursday because the Swiss Nationwide Financial institution and the Financial institution of England lifted rates of interest following the Federal Reserve’s 75-basis-point hike on Wednesday, with central banks aiming to sluggish home exercise within the face of hovering worth pressures.

“It’s turning into more and more essential to see a decline in progress with a purpose to stave off inflation,” mentioned Joseph Abramson, co-chief funding officer at Northland Wealth Administration.

“Folks have been speaking about recession but it surely’s not in market expectation but when you have a look at the ahead earnings progress. In order that’s the subsequent shoe to drop.”

Broadbased declines on the TSX included a decline of 5.3% for the power sector, extending its latest pullback, at the same time as oil costs rose.

U.S. crude oil futures settled practically 2% greater at $117.58 a barrel after the US introduced new sanctions on Iran. learn extra

Know-how, which tends to be notably delicate to greater rates of interest, fell 4.1% and heavily-weighted financials had been 3.1% decrease.

One main outlier amongst particular person shares was LifeWorks Inc (LWRK.TO). Its shares jumped 68% after Canadian wi-fi provider Telus Corp (T.TO) agreed to purchase the human assets providers firm in a C$2.9 billion ($2.2 billion) deal. learn extra

Home knowledge confirmed that Canada’s wholesale commerce decreased by 0.5% in April from March, weighed by a drop in fertilizer imports from Russia.

Canadian authorities bond yields had been combined throughout the curve. The ten-year touched its highest since Could 2010 at 3.664% earlier than pulling again to three.460%, unchanged on the day.

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Reporting by Fergal Smith
Modifying by Chizu Nomiyama

Our Requirements: The Thomson Reuters Belief Rules.

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