By Fergal Smith
TORONTO (Reuters) - Canada's main stock index fell on Friday and posted a decline of more than 5% in April, as disappointing earnings from some major U.S. companies weighed on already fragile investor sentiment due to soaring inflation and rising interest rates.
The Toronto Stock Exchange's S&P/TSX composite index ended down 359.06 points, or 1.7%, at 20,762.00. It was down 5.2% in April, its biggest monthly decline since March 2020 when stocks were in freefall at the start of the coronavirus pandemic.
Wall Street also tumbled as Amazon slumped following a gloomy quarterly report.
"It is one of those days where earnings aren't really helping the market narrative," said Shailesh Kshatriya, director, investment strategies at Russell Investments.
"Canadian equities aren't immune to what is happening across North America but the resource exposure is clearly making the net impact a little bit more palatable for domestic investors."
The TSX has fallen 2.2% in 2022 compared to a 13.3% decline for the S&P 500. The Toronto market has been helped by a 47.6% gain for the energy group and a 13.9% advance for materials, which are both heavily weighted.
All 10 of the Toronto market's major sectors ended lower on Friday. It included a 2.8% decline for industrials, while technology lost 2.5%.
The Canadian economy most likely grew by an annualized 5.6% in the first quarter, official data showed, reinforcing the likelihood of another half-percentage-point interest rate hike by the Bank of Canada in June.
"Canadian consumers are very sensitive to interest rates at this point. ... Perhaps there are implications for the banks through that credit channel that might be weighing on sentiment."
Heavily weighted financials fell 1.3%, while consumer discretionary shares ended 1.8% lower, weighed by a 3.1% decline for Magna International Inc after the auto parts maker lowered its annual profit forecast.
(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Richard Chang)