Toronto Stocks Down Following Hot U.S. Inflation Data
In midday trading on Tuesday, Toronto stocks experienced a decline as they mirrored weakness on Wall Street. This came after U.S. inflation figures for January exceeded expectations. The hotter-than-expected inflation data has raised concerns that the Federal Reserve may delay its first cut to interest rates.
The benchmark S&P/TSX Composite Index was down 1.9% to 20,670.68, while the blue-chip S&P/TSX 60 declined 1.9% to 1,247.57. Losses were spread broadly across various industry sectors.
Leading the decline in trading volume was Constellation Software, which saw its shares fall by 1.2% to C$3,617. This weighed on technology prices. Another notable company, Shopify, experienced a significant drop as well, with its shares falling by 10% to C$107.88. The ecommerce giant reported that higher costs might impact margins in the first quarter of the year.
Hydro One, a utility company, also saw a decrease in its shares, falling by 0.8% to C$39.59. However, the company reported a slightly higher profit in the final quarter of 2023 due to increased revenue. This was driven by approved provincial electricity distribution rates, which offset rising financing and depreciation costs.
SSR Mining faced a drastic decline in its stock, sinking by 52% to C$6.26. The company made the decision to suspend all operations at its Copler mine in Turkey following a significant slip on the heap leach pad.
Finally, OrganiGram, a licensed cannabis producer, saw its shares drop by 8.3% to C$2.65. The company reported a loss and lower-than-expected revenue in its fiscal first quarter, primarily due to lagging international sales.
Overall, Toronto stocks experienced a downturn as a result of the hotter-than-expected U.S. inflation data. The market will continue to monitor the Federal Reserve’s response and its potential impact on interest rates.
Analyst comment
Negative news: Toronto stocks experienced a decline following hot U.S. inflation data. Concerns arise that the Federal Reserve may delay interest rate cuts due to the inflation figures exceeding expectations. Technology, utility, mining, and cannabis stocks all saw significant declines. The market will monitor the Federal Reserve’s response for potential impacts on interest rates.
