TSX Ends Moderately Lower After BoC Raises Interest Rates

(RTTNews) - The Canadian market ended weak on Wednesday after the Bank of Canada raised its benchmark rates by 25 basis points, after holding rates unchanged in the previous two meetings.

Technology and consumer staples shares were the major losers. Energy stocks climbed higher as oil prices moved up.

The benchmark S&P/TSX Composite Index ended down 71.91 points or 0.36% at 19,983.69. The index, which climbed to 20,149.95 after opening marginally up, retreated soon after the central bank announced its interest rate decision.

The Canadian central bank this morning increased its target for the overnight rate by 25 basis points to 4.75%, citing stubbornly high inflation and strong than expected economic growth.

The BoC, which had left interest rates unchanged for two straight meetings, said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. The central bank reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

The bank's Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.

Data from Statistics Canada showed, Canada posted a trade surplus of C$ 1.94 billion in April of 2023, wider than the downwardly revised surplus of C$ 0.23 billion in the previous month. Exports jumped by 2.5% to C$ 64.8 billion, while imports fell by 0.2% to C$ 62.9 billion.

North West Company Inc. (NWC.TO) tanked nearly 11% after quarter results fell short of expectations. Canadian Tire Corporation (CTC.TO) ended more than 8% down, and Shopify Inc (SHOP.TO) ended lower by 6.6%, while Kinaxis (KXS.TO) drifted down nearly 6%.

Open Text Corporation (OTEX.TO), Restaurant Brands International (QSR.TO), Descartes Systems Group (DSG.TO), Agnico Eagle Mines (AEM.TO) and Constellation Software (CSU.TO) lost 2.5 to 4%.

Franco-Nevada Corporation (FNV.TO), CGI Inc (GIB.A.TO), Waste Connections (WCN.TO) andTFI International (TFII.TO) also declined sharply.

Precision Drilling Corporation (PD.TO), Cogeco Communications (CCA.TO), Nutrien (NTR.TO), Fairfax Financial Holdings, Canadian Pacific Kansas City (CP.TO) and Tourmaline Oil Corp (TOU.TO) gained 3 to 4.2%.

Colliers International (CIGI.TO), Cogeco Inc (CGO.TO), Linamar Corporation (LNR.TO), Imperial Oil (IMO.TO), West Fraser Timber (WFG.TO) and Canatian National Railway (CNR.TO) advanced 1 to 2.7%.