Canada Stocks: TSX cedes much of weekly gain after 'too strong' U.S. jobs data

iA

07/10/2022 21:45

(Adds investor quotes and details throughout, updates prices)

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      TSX ends down 395.88 points, or 2.1%, at 18,583.13
    

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      For the week, the TSX rises 0.8%
    

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      Tech falls 4.4%; Shopify ends 9.6% lower
    

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      Financials lose 2.4%
    

  
    By Fergal Smith
       TORONTO, Oct 7 (Reuters) - Canada's main stock index
fell on Friday, barely holding in positive territory for the
week, as the prospect of further aggressive tightening by the
Federal Reserve offset the boost to energy shares from higher
oil prices.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended down 395.88 points, or 2.1%, at 18,583.13. For
the week, it was up 0.8% after giving back much of the 5% rally
it made over the course of Monday and Tuesday.
    Wall Street stocks also fell sharply after a report showing
a solid U.S. jobs gain in September increased the likelihood the
Fed will barrel ahead with an interest rate hiking campaign many
investors fear will push the U.S. economy into a recession.
 urn:newsml:reuters.com:*:nL4N3182L7
    "Employment numbers in the U.S. are too strong for now,"
said Allan Small, senior investment advisor of the Allan Small
Financial Group with iA Private Wealth. "It looks like central
banks will continue their aggressive rate hikes and that's not
what the market wants to see."
    The Canadian economy also added jobs last month, supporting
expectations for further tightening by the Bank of Canada.
 urn:newsml:reuters.com:*:nL1N31811D
    Higher interest rates are a particular headwind for
technology and other high growth sectors, reducing the value to
investors of the future cash flows that companies in those
sectors are expected to produce.
    The Toronto market's tech sector fell 4.4%, with the shares
off e-commerce giant Shopify Inc  SHOP.TO  down 9.6%, while
healthcare tumbled 11.6% as some cannabis producers gave back
all of the previous day's sharp gains.
    Heavily weighted financials lost 2.4%, while the materials
group ended 3.8% lower.
    In contrast, energy was up 0.2%, lifting its weekly advance
to 15%, which was the biggest since November 2020, as oil
benefited from the OPEC+ decision to slash output.  urn:newsml:reuters.com:*:nL1N31806H
    U.S. crude futures  CLc1  were up 4.7% on Friday at $92.62 a
barrel.
 (Reporting by Fergal Smith; Additional reporting by Shashwat
Chauhan in Bengaluru; Editing by Richard Chang)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446;))