TSX Ends Sharply Lower As U.S. Inflation Data Triggers Heavy Selling

(RTTNews) - Canadian stocks plunged sharply on Friday as data showing a bigger than expected surge in U.S. inflation in May raised concerns about growth and triggered a sell-off in the market.

The benchmark S&P/TSX Composite Index ended with a loss of 289.07 points or 1.41% at 20,274.82, after dropping to a low of 20,196.16.

Healthcare, technology, consumer discretionary, industrials, financials, energy and real estate stocks tumbled. Several stocks from consumer staples and communications sectors too drifted lower. Utilities shares turned in a mixed performance, while materials shares moved up, tracking higher bullion prices.

Goeasy (GSY.TO), Methanex Corp (MX.TO), Shopify Inc (SHOP.TO), BRP Inc (DOO.TO), Kinaxis Inc (KXS.TO) and Magna International (MG.TO) lost 4.5 to 8%.

Canadian Pacific Railway (CP.TO), FirstService Corp (FSV.TO), CGI Inc (GIB.A.TO), Constellation Software (CSU.TO) and Fairfax Financial Holdings (FFH.TO) drifted down 2.5 to 4%.

Data from Statistics Canada showed the Canadian economy added a net 39,800 jobs in May, above market expectations of 30,000, as the sharp acceleration in U.S. income has raised prospects for an aggressive policy tightening by the Federal Reserve.

The unemployment rate in Canada fell to 5.1% in May from 5.2% in April.

U.S. Labor Department data said the consumer price index jumped by 1% in May after rising by 0.3% in April. Economists had expected consumer prices to increase by 0.7%.

With the bigger than expected monthly increase, the annual rate of consumer price growth accelerated to 8.6% in May from 8.3% in April, showing the biggest surge since December 1981. The annual growth was expected to be unchanged.