Canada’s main stock index fell on Tuesday by the most in nearly two months, including declines for heavily-weighted energy and financial shares, as commodity prices dropped and domestic data showed inflation rising for the first time in 10 months.
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended down 297.90 points, or 1.45%, at 20,242.07, its biggest decline since March 15. The major U.S. indexes, such as the S&P 500, also fell but by a lesser amount.
“Overall, the indices are still up quite nicely for the year but the TSX does seem to have lost a little of its sheen versus the S&P 500,” said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth. “That’s largely because the main drivers of the TSX are lagging the upside drivers in the U.S.”
While a rebound in technology shares has helped underpin the S&P 500 this year, the resource and financial shares that dominate the Toronto market have been buffeted by a pullback in oil prices and stress in the U.S. regional banking sector.
Together, the financials, energy and materials sectors account for nearly 60% of the Toronto market’s weighting.
The energy sector lost 2.2% on Tuesday as oil settled 0.4% lower at $70.86 a barrel.
Gold and copper prices also fell, while the materials group, which includes precious and base metals miners and fertilizer companies, ended 2% lower.
Shares of Teck Resources Ltd <TECKb.TO>, which is the target of a hostile bid by Swiss miner Glencore PLC (GLEN.L), fell 3.7%.
All ten major sectors lost ground, including a decline of 1.3% for economically-sensitive financials.
Canada’s annual inflation rate rose to 4.4% in April from 4.3% in March, which could pressure the central bank to raise interest rates again after having paused its tightening campaign since January.