Bay Street Looks Headed For Weak Start

(RTTNews) - Canadian shares are seen opening lower on Thursday, weighed down by concerns about economic slowdown as central banks are set to keep interest rates higher for longer to combat inflation.

Weak crude oil and bullion prices are likely to weigh as well.

On the economic front, data on Canadian new housing prices is due at 8:30 AM ET. New home prices edged down by 0.1% month-on-month in July. Year-on-year, new home prices fell by 0.9% in July.

In earnings news, Vecima Networks Inc. (VCM.TO), on Thursday reported higher earnings and revenues for the fourth quarter. Quarterly earnings increased to C$5.1 million or C$0.21 per share from C$3.5 million or C$0.16 per share for the same period of last year.

The Canadian market ended slightly down on Wednesday, despite spending much of the day's session in positive territory.

Worries about interest rates and the likely impact on economic growth weighed on stocks. The Federal Reserve left its interest rates unchanged today, but projected an interest rate hike before the end of the year.

Also, hotter than expected Canadian inflation data has raised concerns that the Bank of Canada will tighten its monetary policy.

The benchmark S&P/TSX Composite Index, which climbed to 20,351.50 around mid morning, gaining more than 130 points in the process, settled at 20,214.69 with a loss of 4.20 points or 0.02%.

Asian stocks tumbled on Thursday after the U.S. Federal Reserve warned that interest rates will stay higher for longer to combat stubborn inflation.

The Fed's hawkish tone on inflation and interest rates indicated that the U.S. central bank may not cut interest rates next year by as much as it was earlier thought.

European stocks are down firmly in negative territory on interest-rate concerns after the Fed said on Wednesday that policy would remain restrictive for longer to curb stubborn inflation.

The Bank of England today left its policy rate unchanged at 5.25% with the bank's Monetary Policy Committee (MPC) voting 5-4 in favor of holding the policy rate steady.

The Swiss National Bank held rates unchanged but warned that more increases may still be needed. Sweden's Riskbank and Norway's central bank have raised their respective interest rates by 25 basis points.

In commodities, West Texas Intermediate Crude oil futures are down $0.59 or 0.66% at $89.07 a barrel.

Gold futures are down $25.60 or 1.3% at $1,941.50 an ounce, while Silver futures are down $0.371 or 1.56% at $23.465 an ounce.