S&P/TSX composite down more than 200 points amid broad selloff led by tech sector

TORONTO - Canada’s fundamental inventory index closed down 1.2 per cent Tuesday as a part of a broad selloff brought on by surging bond yields that additionally pushed U.S. inventory markets down.

The S&P/TSX composite index closed down 262.88 factors at 21,274.57 with losses led by the know-how, industrial and well being care sectors.

In New York, the Dow Jones industrial common closed down 543.34 factors at 35,368.47. The S&P 500 index ended down 85.74 factors at 4,577.11, whereas the Nasdaq composite was down 386.86 factors at 14,506.90.

The sell-off comes as greater bond yields curb investor urge for food for risker belongings, stated Candice Bangsund, portfolio supervisor for Fiera Capital.

“The sharp transfer greater in bond yields has been pushed by elevated hypothesis for a extra aggressive path to coverage normalization. Buyers at the moment are pricing in 4 charge hikes from the Federal Reserve beginning as early as March, and that is clearly rattling each mounted revenue and bond markets right here thus far in 2022.”

The elevated volatility and stress on fairness markets is essentially anticipated after a really sturdy 2021, she stated.

“Fairness markets are buying and selling at some elevated valuations. And our sense was that volatility would resurface, notably given the transition that’s happening from extremely stimulative financial coverage in the direction of one thing much less supportive.”

Whereas pretty widespread, the sell-off was led by know-how companies and declines this 12 months have been sharper within the U.S., stated Bangsund.

“The Canadian market’s holding up a bit bit higher, and year-to-date doing significantly better than its U.S. counterparts given a excessive focus within the vitality sector that’s performed extraordinarily nicely.”

Oil has been rising amid sturdy demand, regardless of the Omicron variant, in addition to tight provides.

“The worldwide demand outlook for crude stays pretty brilliant,” stated Bangsund.

Crude oil rose once more Tuesday, closing up US$1.53 at US$84.83 per barrel and the February pure fuel contract was up two cents at US$4.28 per mmBTU.

Nonetheless, Canadian vitality producers noticed their share costs dip amid heavy buying and selling, together with Cenovus Vitality Inc. down 1.8 per cent, Crescent Level Vitality Corp. down 2.3 per cent, and Suncor Vitality Inc. down 0.94 per cent.

On the know-how entrance, Shopify Inc. was down 4.93 per cent, Constellation Software program Inc. misplaced 3.06 per cent, and Lightspeed Commerce Inc. dropped 8.06 per cent.

The Canadian greenback traded for 79.81 cents US in contrast with 79.87 cents US on Monday as a powerful U.S. greenback limits its development, stated Bangsund.

“You'd assume given the resilience and the exceptional features that we’ve seen in crude costs, the Canadian greenback could be buying and selling at the next valuation, however the Canadian greenback has been in the end capped by basic underlying power within the U.S. greenback.”

The February gold contract closed down US$4.10 at US$1,812.40 an oz. and the March copper contract was down 4 cents at $4.38 a pound.

This report by The Canadian Press was first printed Jan. 18, 2022.

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