TSX closes down as Shopify slumps, global stocks wobble

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

By Nichola Saminather and Bansari Mayur Kamdar

(Reuters) - Canada's main stock index closed lower on Tuesday, dragged down by 13.6% slump in e-commerce company Shopify and weakness in global markets ahead of tech earnings reports and a U.S. interest rate hike this week.

The Toronto Stock Exchange's S&P/TSX composite index closed down 131.8 points, or 0.69%, at 18,972.68.

Shares of Shopify, the worst performer on the index, posted their biggest daily loss since May after the company laid off https://news.shopify.com/changes-to-shopifys-team 10% of its workforce.

Graphic: Shopify down over 75% YTD, https://fingfx.thomsonreuters.com/gfx/mkt/byvrjwaxzve/SHOP.PNG

"It is really shining a light on the real growth slowdown that we're seeing here, in particular in e-commerce," said James Telfser, portfolio manager at Aventine Investment Counsel.

The TSX information technology sector closed 4.6% lower.

Microsoft and Google are set to report results on Tuesday after the market close.

The U.S. Federal Reserve is expected to raise interest rates 75 basis points on Wednesday and investors on both sides of the border are waiting to parse the central bank's statement for any shift in rhetoric.

A drop in U.S. consumer confidence, a profit warning from Walmart Inc and another cut in the International Monetary Fund's global growth forecast added to market jitters.

The flight to safety lifted Canadian gold miners, with the materials group up 1%. Gold companies OceanaGold Corp, New Gold Inc and Wesdome Gold Mines were the biggest gainers.

This, despite a lacklustre showing from spot gold, which lost 0.1%. While gold is considered a hedge against inflation, rising interest rates reduce the appeal of the non-yielding asset.

The energy sector lost 0.7%, weighed on by a 1.8% drop in U.S. crude. The United States said it would sell an additional 20 million barrels of crude from its Strategic Petroleum Reserve as part of a previous plan to use the facility to calm oil prices. [O/R]

(Reporting by Nichola Saminather in Toronto and Bansari Mayur Kamdar Bengaluru; Additional reporting by Johann M Cherian; Editing by Sriraj Kalluvila and Grant McCool)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting