TSX Ends Weak Despite Recovering From Early Setback

(RTTNews) - Despite staging a strong recovery after a sharp setback earlier in the day, the Canadian market stayed in negative territory and ended modestly lower on Wednesday.

Stocks tumbled early on in the session after the Bank of Canada hiked its benchmark interest rate by 1%, and data from the U.S. Labor Department showed a bigger than expected increase in U.S. consumer prices, adding to concerns about the outlook for interest rates.

The Bank of Canada raised rates by 100 basis points to 2.5% to combat galloping inflation. The central bank also lifted its near-term inflation forecasts, warning of an increased risk of higher price gains becoming entrenched, as it slashed its growth forecasts for 2022 and 2023.

Meanwhile, data from the U.S. Labor Department showed that the consumer price index shot up by 1.3% in June after jumping by 1% in May. Economists had expected consumer prices to leap by 1.1%.

With the bigger than expected monthly surge, the annual rate of consumer price growth accelerated to 9.1% in June, reflecting the biggest increase since November 1981. Economists had expected the annual rate of consumer price growth to accelerate to 8.8% in June from 8.6% in May.

The benchmark S&P/TSX Composite Index, which plunged 300 points to 18,378.83, ended the session with a loss of just 63.45 points or 0.34% at 18,615.19.

Financials and industrials shares ended weak, while shares from consumer staples and materials sectors posted strong gains. Shares from the rest of the sectors ended on a mixed note.

Ritchie Bros. Auctioneers (RBA.TO) plunged more than 9%. Toromont Industries (TIH.TO), ATS Automation Tooling Systems (ATA.TO), TFI International (TFII.TO), Cogeco Communications (CCA.TO), Cogeco Inc (CGO.TO), Magna International (MG.TO) and Goeasy (GSY.TO) declined 2 to 6%.

Precision Drilling (PD.TO), Bank of Montreal (BMO.TO), Cargojet (CJT.TO) and Royal Bank of Canada (RY.TO) also ended notably lower.

Sleep Country Canada Holdings (ZZZ.TO) climbed more than 7%. Loblaw Companies (L.TO), Jamieson Wellness (JWEL.TO), Tourmaline Oil Corp (TOU.TO), George Weston (WN.TO), Rogers Communications (RCI.A.TO), Franco-Nevada Corporation (FNV.TO) and Nutrien (NTR.TO) also ended notably higher.