Toronto market hits 6-day low as resource shares slide
By Fergal Smith
(Reuters) - Canada's main stock index fell on Tuesday to a near one-week low as signs of faltering global economic growth pressured commodity-linked stocks, and ahead of an expected move this week by the Bank of Canada to begin cutting interest rates.
The Toronto Stock Exchange's S&P/TSX composite index ended down 138.51 points, or 0.63%, at 21,978.18, its lowest closing level since last Wednesday.
U.S. job openings fell in April to the lowest in more than three years in a sign that labor market conditions are softening. It follows data on Monday that showed a slowdown in U.S. manufacturing activity for a second straight month in May.
"Any hint of weakness in the U.S. or the global economy doesn't bode well for commodity prices," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth, adding that after recent gains for resource shares the decline in commodity prices has been "used as an excuse to take some profits off the table."
The materials sector, which includes metal miners and fertilizer companies, fell nearly 4% as gold and copper prices declined.
Energy also lost ground, falling 2.06%, as the price of oil settled 1.31% lower at &77.52 a barrel.
Helping to limit the TSX's decline was a gain for the defensively-orientated consumer staples sector. It rose 0.77%, while the utilities group, which includes high-dividend paying stocks that could particularly benefit from rate cuts, added 0.23%.
Investors see a roughly 80% chance that the Bank of Canada would cut rates on Wednesday for the first time since March 2020.
"A lot will hinge on the Bank of Canada's rate decision tomorrow. It is shaping up to be a pretty pivotal day," Picardo said.
(Reporting by Fergal Smith in Toronto and Shubham Batra in Bengaluru; Editing by Shreya Biswas and Aurora Ellis)
