Canadian Market Drifts Lower As U.S. Inflation Data, Virus Concerns Weigh

(RTTNews) - The Canadian stock market recovered after a weak start, but swiftly fell into negative territory again Tuesday morning as data showing an acceleration in U.S. inflation raised concerns the Fed might resort to a faster withdrawal of policy support.

Reports showing a surge in coronavirus cases in several countries across the globe weigh as well.

The Fed is scheduled to announce its monetary policy decision Wednesday afternoon. The central bank is widely expected to accelerate its timetable for reducing bond purchases. Also, there are expectations the bank will start raising interest rates shortly after bringing its asset purchase program to a halt.

Data from the Labor Department showed the producer price index for final demand advanced by 0.8% in November after climbing by 0.6% in October. Economists had expected producer prices to rise by 0.5%. With the stronger than expected monthly price growth, the annual rate of producer price growth accelerated to 9.6% in November from 8.8% in October.

Information technology, telecom, consumer staples and energy stocks are among the notable losers. Industrials and healthcare shares are finding modest support, while financial and consumer discretionary stocks are mostly subdued.

The benchmark S&P/TSX Composite Index, which drifted down to 20,615.96 earlier this morning, is down 93.39 points or 0.45% at 20,655.06 a little before noon.

Nuvei Corp (NVEI.TO) is declining more than 6%. CCL Industries (CCL.A.TO) is down 5.2%, Lightspeed Pos (LSPD.TO) and Ritchie Bros. Auctioneers (RBA.TO) both are down by about 3.3%, Shopify Inc (SHOP.TO) is down 2.5% and Cargojet Inc (CJT.TO) is lower by about 2.2%.

Hexo Corp (HEXO.TO) is down more than 7%. Hexo reported total net revenue of $50.2 million for the first quarter of 2022, an increase of 29% compared to the fourth quarter of financial year 2021.

CGI Inc (GIB.A.TO), New Gold Inc (NGD.TO), Crescent Point Energy (CPG.TO), Baytex Energy (BTE.TO), Bomardier Inc (BBD.B.TO), B2Gold Corp (BTO.TO) and Kinross Gold Corp (K.TO) are down 1 to 3.3%.

Canadian Pacific Railway (CP.TO) is gaining 3.2%. Bausch Health Companies (BHC.TO) is up 2.7% and Brp Inc (DOO.TO) is climbing 2.6%. Manulife Financial Corp (MFC.TO) is advancing 1.1%.