Canada’s TSX drops to 9-day low amid a drop in commodity prices
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The main index in Canada’s financial market dropped on Thursday to the lowest closing levels in nine days. The drop comes amid a drop in oil and metal prices amid increased fears about the rising interest rates globally.
TSX drops to a 9-day low
Investors are currently worried about the aggressive interest rate hikes in the United States. The situation has also worsened because of the growing demand in leading commodity consumer China.
The Toronto Stock Exchange’s TSX index dropped Thursday and went to the lowest closing level in nine days. The index closed the day with a 73.38 decline, representing a 0.37% drop. At market close, this index was trading at $19,884, which was the lowest closing level since November 8.
The TSX index is not the only one that turned bearish on Thursday. The Wall Street S&P 500 index also exhibited a similar outlook. The drop was caused by hawkish comments from the US Federal Reserve.
Despite the interest rate hikes this year, the recently released economic data showed that the labor market remained tight. This resulted in some investors worrying about an aggressive interest rate hike.
The energy sector in Toronto dropped 0.6% as the oil price was 4.6% lower to trade at $81.64 per barrel. The situation was also worsened by the rising cases of COVID-19 infections in China.
Material companies suffered some of the worst effects amid the poor economic outlook. The miners of precious and base metals alongside fertilizer companies also dropped by 1.2%. Gold and copper prices have also plunged.
The technology sector is one that largely reacts to the economic outlook. The increasing interest rates have affected the performance of tech stocks, and the recent hawkish comments led to these stocks closing 1.8% lower.
Restaurant brands are still performing well
A slight gain reduced the plunge in the index’s price in Restaurant Brands International. The company’s shares increased 4.4% after the China-based operator of Tim Hortons coffee chain announced that it had created a two-year partnership deal with the Alibaba Group grocery chain.
Greg Taylor, a portfolio manager at Purpose Investments, commented on the development, saying that Restaurant Brands were some of the best-performing companies in Canada. Moreover, the brand appeared interested in seeking exposure to China, and Alibaba was well-suited to assist with this.