TSX Ends Weak On Interest Rate Concerns After BoC Announcement, Hot U.S. Inflation Data

(RTTNews) - The Canadian market ended on a weak note on Wednesday as stocks fell amid fading hopes of an interest rate cut anytime soon after data showed a bigger than expected increase in U.S. consumer price inflation.

The Bank of Canada's statement that the central bank will continue with quantitative tightening weighed as well on sentiment.

The benchmark S&P/TSX Composite Index ended down by 162.65 points or 0.73% at 22,199.13, about 100 points off the day's low. The index stayed in negative territory right through the day's session.

Real estate, healthcare, utilities, technology and financials shares were among the major losers. Consumer discretionary and consumer staples stocks were weak as well, while energy stocks moved higher on firm crude oil prices.

Brookfield Infrastructure Corporation (BIPC.TO), EQB Inc (EQB.TO), Colliers International (CIGI.TO), Cogeco Communications (CCA.TO), Magna International (MG.TO), Cargojet (CJT.TO) and Shopify Inc (SHOP.TO) ended lower by 3 to 5%.

West Fraser Timber (WFG.TO), Canadian Tire Corporation (CTC.A.TO), Bank of Montreal (BMO.TO), FirstService Corporation (FSV.TO) and TFI International (TFII.TO) also ended notably lower.

Canadian Tire Corporation (CTC.TO) rallied 5.5%. Cameco Corporation (CCO.TO), Imperial Oil (IMO.TO), Suncor Energy (SU.TO), Tourmaline Oil Corp (TOU.TO), Dollarama Inc (DOL.TO), Canadian Natural Resources (CNQ.TO), Fairfax Financial Holdings (FFH.TO) and Canadian National Railway (CNR.TO) gained 1 to 3.5%.

The BoC decided to leave interest rates unchanged, saying inflation is still "too high." The central bank held its target for the overnight rate at 5%, with the bank rate at 5.25% and the deposit rate at 5%.

The accompanying statement said inflation is still "too high" but noted consumer price inflation and core inflation have eased further in recent months.

The central bank said its Governing Council will be looking for evidence the downward momentum for inflation is sustained.

The central bank said it expects consumer price inflation to be close to 3% during the first half of this year, move below 2.5% in the second half and reach its 2% inflation target in 2025.

The bank expects Canadian GDP to grow by 1.5% in 2024, 2.2% in 2025 and 1.9% in 2026.

Meanwhile, the total value of building permits in Canada increased by 0.3% over a month to $11.8 million in February, following a downwardly revised 12.9% surge in January, data from Statistics Canada showed.

Data from the Labor Department showed U.S. consumer prices advanced by slightly more than expected in the month of March, climbing by 0.4%, matching the increase seen in February. Economists had expected consumer prices to rise by 0.3%.

The report also said the annual rate of consumer price growth accelerated to 3.5% in March from 3.2% in February. Economists had expected a more modest acceleration to 3.4%.