TSX posts biggest drop in 3 weeks as Fed signals more rate hikes
By Fergal Smith
TORONTO (Reuters) - Canada's main stock index fell on Wednesday, tracking declines on Wall Street, as Federal Reserve Chair Jerome Powell signaled the U.S. central bank is not yet done raising interest rates as it battles inflation.
The Toronto Stock Exchange's S&P/TSX composite index ended down 240.70 points, or 1.2%, at 19,277.01, its biggest decline since Oct. 14.
On Tuesday, the index posted its highest closing level in more than six weeks.
"Fed Chair Powell reminded markets that inflation has been high for 18 months and that it is too early to think about pausing rate hikes," Edward Moya, a senior market analyst at OANDA in New York, said in a note.
U.S. stocks reversed course and turned sharply lower as Powell's message took away enthusiasm over a Fed policy statement that raised interest rates by 75 basis points but signaled that smaller rate hikes may be on the horizon.
The Toronto market's materials group, which includes precious and base metals miners and fertilizer companies, lost 4.3% as gold and copper prices fell.
It included a decline of 17.8% for Ero Copper Corp after the copper miner's third-quarter profit missed analysts' estimates.
Shares of Canada Goose Holdings Inc ended 9.1% lower after the luxury parka maker cut its full-year revenue and profit forecast, with persistent COVID-related lockdowns and store closures in China hurting its business.
The consumer discretionary sector fell 1.7%, while technology was down 2.4%.
(Reporting by Fergal Smith; Additional reporting by Granth Vanaik in Bengaluru; Editing by Paul Simao)