TSX falls as investors await evidence of peak inflation

·2 min read
FILE PHOTO: The facade of the original Toronto Stock Exchange building is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Wednesday, including declines for financial and technology shares, as bond yields climbed ahead of key U.S. inflation data later in the week.

The Toronto Stock Exchange's S&P/TSX composite index ended down 135.78 points, or 0.7%, at 20,792.43, giving back much of the previous day's gains.

"The market is Doctor Jeckyll and Mr Hyde," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth, referring to the split personality of a fictional character in the novella by Robert Louis Stevenson.

Until data shows that inflation has peaked, it is going to be "a very choppy market," Small added.

The U.S. inflation report for May, due on Friday, could help guide expectations for the pace of Federal Reserve interest rate hikes.

U.S. stocks were also lower on Wednesday as Treasury yields rose above 3% and technology shares fell.

The Toronto market's technology sector was down 0.5%, pressured by a near-20% plunge in the shares of enterprise software solutions company Enghouse Systems Ltd after the company reported quarterly results.

Heavily-weighted financials fell 0.9%, while industrials ended 1.7% lower as worries rose about the outlook for the global economy. The Organisation for Economic Cooperation and Development cut its 2022 global growth forecast to 2.8% from 3.2%.

Helping to lessen the TSX's decline was further gains for energy shares as oil prices climbed. U.S. crude oil futures settled 2.3% higher at $122.11 a barrel.

Among other stocks that gained ground was Dollarama Inc. It rose 5.3% after beating estimates for quarterly sales.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Marguerita Choy)

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