Canadian Market Slips Again; BoC Leaves Rates Unchanged

(RTTNews) - Canadian stocks drifted lower on Wednesday, weighed down by persisting concerns about the ongoing conflict between the U.S. and Iran and its potential impact inflation and overall economic growth. Meanwhile, the Bank of Canada left its interest rates unchanged as widely expected for the fourth consecutive meeting.

Materials, technology and industrials stocks fell. Several stocks from real estate and utilities sectors too fell. Energy stocks moved higher, tracking firm oil prices.

The benchmark S&P/TSX Composite Index was down 213.51 or 0.63% 33,370.83 a few minutes before noon.

The Canadian central bank said it decided to maintain its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The decision to once again leave rates unchanged came as the Canadian central bank noted the evolving conflict in the Middle East is causing heightened volatility and U.S. trade policy continues to reshape global trade patterns.

While acknowledging the Iran war has led to sharply higher energy prices and transportation disruptions, the BoC said it stands ready to respond as needed and remains committed to maintaining Canadians' confidence in price stability through this period of global upheaval.

The central bank expects consumer price inflation to rise further to 3% in April after climbing by 2.4% in March because of sharply higher gasoline prices. The bank said inflation will likely drop to the 2% target early next year.

The BoC also forecast GDP growth of 1.2% 2026, rising to 1.6% in 2027 and 1.7% in 2028 as growth in exports and business investment resumes along a lower trajectory.

The Materials Capped Index dropped nearly 2%. Orla Mining, Perpetua Resources, Novagold, Seabridge Gold, Wheaton Precious Metals, Endeavour Silver Corp and Eldorado Corporation lost 3%-5%.

Methanex Corp climbed 5.2%. Transcontinental, Nutrien and Allied Gold Corporation also moved notably higher.

Among tech stocks, CGI Inc. tanked 13.3%. The company reported second-quarter net earnings of $444.7 million, up 3.5% year-over-year, for a margin of 10.7%, and diluted EPS of $2.09, up 10.6% year-over-year.

Adjusted net earnings came in at $483.4 million, up 0.6% year-over-year, for a margin of 11.6%, and adjusted diluted EPS1,2 of $2.27, up 7.1% year-over-year;

Tecsys, Shopify, Firan Technologies and Constellation Software lost 1%-2.7%.

In the industrials sector, Canadian National Railway drifted down by about 5.6% after reporting net income of C$1,146 million for the first quarter, a decrease of C$15 million, or 1% from a year ago. Adjusted net income came in at C$1,102 million, a decrease of C$59 million, or 5% from the year-ago quarter.

Tfi International, MDA Space, Boyd Group Services, Ats Corporation, Cargojet and WSP Global lost 1%-2.2%.

Energy stocks Strathcona Resources, Parex Resources, Cenovus Energy, Athabasca Oil Corp., Enerflex and International Petroleum Corporation gained 3%-4.2%. Imperial Oil, CDN Natural Resources, Suncor Energy and Vermilion Energy also moved up sharply.