TSX falls to 2-month low as financials, resource stocks slide

TSX ends down 1.2% at 21,698.11

*

Posts its lowest closing level since April 17

*

Energy falls 3.1%

*

Financials end 1.2% lower

By Fergal Smith

June 13 – Canada’s main stock index fell to a near two-month low on Thursday, weighed by declines for financial and commodity-linked shares, as investors worried that the Federal Reserve would keep interest rates elevated for longer than previously expected.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 263.44 points, or 1.2%, at 21,698.11, its lowest closing level since April 17.

The Federal Reserve on Wednesday trimmed the number of rate cuts expected this year and raised the long-run “neutral” rate needed to keep inflation in check while maintaining steady growth.

The U.S. central bank is trying to communicate that “we’re going to revert back to a more normalized interest rate environment as opposed to the ‘la-la land’ we’ve been living in prior to the rate hikes,” said Michael Sprung, president at Sprung Investment, referring to the colloquial term for a dream world.

Interest rates had been at historically low levels in the years after the global financial crisis until major central banks began hiking aggressively in 2022 to tame inflation.

Higher interest rates reduce the value to investors of the expected cash flows that companies are expected to produce.

“The world has got to adjust to a more normalized valuation regime. It think it’s going to be a tough adjustment for people to make,” Sprung said.

Interest rate sensitive sectors such as utilities, real estate and financials account for 35% of the weighting on the Toronto market.

Financials fell 1.3% and energy was down 3.1%, with a decline of 3.8% for shares of Cenovus Energy Inc .

The materials group, which includes metal miners and fertilizer companies, lost 1.8% as gold and copper prices fell.

BlackBerry Ltd was among the biggest decliners, with shares of the software company falling 9.2% to its lowest in nearly three months.

This article was generated from an automated news agency feed without modifications to text.

3.6 Crore Indians visited in a single day choosing us as India’s undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.

More
Less

Published: 14 Jun 2024, 02:09 AM IST

Source link

indiansolution2019

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Latest Market News Today Live Updates June 14, 2024: Buy or sell: Vaishali Parekh recommends three stocks to buy today — June 14

Fri Jun 14 , 2024
Latest Market News Today Live Updates: Catch today’s market wrap-up! Track Nifty 50 and Sensex movements, along with top gainers and losers. See how Asian and US markets fared and which sectors led the charge (or declined). Summary: Follow Mint’s market blog for real-time updates on your favourite companies. This […]
Latest Market News Today Live Updates June 14, 2024: Buy or sell: Vaishali Parekh recommends three stocks to buy today — June 14

You May Like