TORONTO — Canada's main stock index ended down more than 100 points on Canadian inflation data that was higher than investors had hoped, while U.S. markets were also down.
The S&P/TSX composite index was down 123.78 points at 18,674.40.
Inflation in September was higher than expected, said Vincent Tonietto, senior vice-president and portfolio manager with Fiduciary Trust Canada, much like last week’s inflation data out of the U.S.
Statistics Canada's latest consumer price index report released Wednesday showed that overall inflation was at 6.9 per cent in September, down slightly from 7.0 per cent in August, but food prices were up 11.4 per cent year over year, increasing at the fastest rate since August 1981.
Inflation was the “story of the day,” and indeed the year, said Tonietto.
“It’s likely to stay that way for a while."
Statistics Canada attributed the food price increases to unfavourable weather conditions, higher prices for fertilizer and natural gas, and the ongoing invasion by Russia of Ukraine.
In New York, the Dow Jones industrial average was down 99.99 points at 30,423.81. The S&P 500 index was down 24.82 points at 3,695.16, while the Nasdaq composite was down 91.89 points at 10,680.51.
The Canadian dollar traded for 72.57 cents US, compared with 72.70 cents US on Tuesday.
It’s looking more and more likely that the Bank of Canada will increase its key interest rate next week by three-quarters of a percentage point instead of a half percentage point hike, said Tonietto.
“I guess the market is still looking for some data confirmation that central banks will slow down their tightening. And what we've seen today is not necessarily in line with that,” he said.
Energy stocks were up Wednesday amid the overall downturn, however.
“That’s pretty much the only good place to be in today’s market,” said Tonietto, explaining that investors are looking for assets to hold that will benefit from inflation.
The December crude contract was up $2.45 at US$84.52 per barrel and the November natural gas contract was down 28.3 cents at US$5.46 per mmBTU.
So far, earnings reported in the U.S. have been fairly solid, said Tonietto, hopefully giving a little bit of optimism for the markets going into earnings season.
The December gold contract was down US$21.60 to US$1,634.20 an ounce and the December copper contract was down 4.4 cents at US$3.32 a pound.
This report by The Canadian Press was first published Oct. 19, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
The Canadian Press
