Toronto market falls by the most in 5 months as Shopify tumbles

·2 min read
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 Thursday, unwinding most of a two-day rally, as e-commerce giant Shopify missed estimates for quarterly results and investor worries that the Federal Reserve could hike interest rates aggressively returned.

The Toronto Stock Exchange's S&P/TSX composite index ended down 488.78 points, or 2.3%, at 20,696.17, its biggest decline since Nov. 30, 2021, after posting solid gains on Tuesday and Wednesday.

"We got a huge relief rally yesterday off less fear of the Fed and it is just reversing itself today across everything," said Matt Skipp, president of SW8 Asset Management.

Wall Street's main indexes also tumbled as investors fretted the Fed's half-percentage-point rate hike on Wednesday might not be enough to bring inflation under control and the U.S. central bank might need to take more drastic action.

The Toronto market's information technology sector fell 6.5%, paced by a decline of 14.3% for shares of Shopify Inc as the e-commerce giant reported its slowest quarterly revenue growth in about seven years and delivered a big miss on profit.

"The repricing of growth and speculative stocks continues unabated," Skipp said. "It has a snowball effect ... it leads to forced selling because of margin calls."

Bombardier Inc shares declined 8.3% even as the business jet maker reported a smaller quarterly adjusted loss.

That weighed on the industrials group, which fell 2.7%, while heavily-weighted financials ended 1.9% lower.

The materials group, which includes precious and base metals miners and fertilizer companies, lost nearly 3.0% as gold and copper prices fell.

(Reporting by Fergal Smith; Additional reporting by Bansari Mayur Kamdar and Susan Mathew in Bengaluru; Editing by David Gregorio)

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