Equities in North America displayed their nerves Wednesday, with central banks openly discussing rate hikes for the very near future.
The TSX Composite Index lost 142.23 points to conclude midweek Wednesday at 21,788.60.
The Canadian dollar fell 0.31 cents to 79.79 cents U.S.
Tech proved the biggest anchor on the index, with Lightspeed POS down $3.07, or 7.7%, to $36.63, and Shopify sagged $54.61, or 6.3%, to $823.86.
Real-estate was also a worry, as InterRent REIT dropped 57 cents, or 3.8%, to $14.57, while Allied Properties REIT faltered $1.45, or 3.1%, to $44.69.
In energy, Whitecap Resources moved earthward 48 cents, or 4.6%, to $9.88, while Vermilion Energy slid $1.58, or 5.9%, to $25.27.
Utilities was strongest fop the gainers, as Transalta copped 50 cents, or 3.8%, to $13.57, while Boralex advanced $1.96 or 3.4%, to $41.56.
Communications became green in the afternoon, with Quebecor tacking on 76 cents, or 2.5%, to $31.27, while Cogeco Communications moved forward $1.51, or 1.4%, to $105.86.
Gold shone, as OceanaGold gained five cents, or 1.8%, to $2.83, while Equinox took on 11 cents, or 1.1%, to $10.18.
The United States and its allies were set to impose fresh sanctions on Russian banks and officials and ban new investment in Russia over civilian killings in northern Ukraine, which President Volodymyr Zelenskiy described as “war crimes.”
Russia denied targeting civilians.
The Kremlin said on Wednesday peace talks with Kyiv were not progressing as rapidly or energetically as it would like.
The Ford government in Ontario plans to raise the hourly minimum wage by 50 Canadian cents beginning in October, in what would be the second hike in an election year.
Economically speaking, Western University’s IVEY School of Business released its Purchasing Managers Index, which shot up in March to 74.2 from 60.6 in February, and compared favourably with the 72.9 figure in March 2021.
Reports circulated Wednesday that the Bank of Canada will raise its overnight interest rate by 50 basis points at its next policy meeting on April 13, according to a majority of economists polled by Reuters, who also sharply raised their inflation forecasts for this year.
The TSX Venture Exchange stayed in the minus category, 10.35 points, or 1.2%, to 880.88.
Eight of the 12 TSX subgroups were in negative country, weighed most by information technology, 3.3% to the bad, real-estate, hesitating 1.7%, and energy, down 1.4%.
The four gainers were led mostly by utilities, up 1.4%, communications, better by 0.8%, and gold, stronger 0.7%.
Stocks fell for a second day on Wednesday and rates soared to new heights as the Federal Reserve gave more guidance on how fast it will tighten monetary policy to fight inflation, raising concerns it may slow the economy.
The Dow Jones Industrials plummeted 144.67 to end the session at 34,496.51.
The S&P 500 dumped 43.97 points to 4,481.15
The NASDAQ Composite wilted 315.35 points, or 2.2%, to 13,888.82.
The Fed’s release of its meeting minutes indicated on Wednesday afternoon that officials “generally agreed” it should shrink its balance sheet by $95 billion per month. The minutes also showed the central bank was considering larger rate hikes than its usual 25-basis-point, or quarter-point, increments.
As the Fed hikes rates, investors have begun searching for stocks with stable profits and shying away from those offering future growth. That includes the utilities, health care and consumer staples sectors — which continued to climb Wednesday, with Amgen and Johnson & Johnson rising about 2% each. Consumer staples such as Walmart, Coca-Cola and Procter & Gamble also inched slightly higher.
Tech shares fell again on Wednesday following Tuesday’s losses, as investors rotated out of the group and braced for higher rates to slow the economy.
Apple, Microsoft, Amazon and Tesla contributed to the sector’s decline and the NASDAQ’s fall. Chipmakers Nvidia withered 6% and Marvell Technology dipped 2%, both continuing their descent.
Treasury prices fell as yields increased to 2.59%, from Tuesday’s 2.55%. Treasury prices and yields move in opposite directions.
Oil prices skidded $4.85 to $97.11 U.S. a barrel.
Gold prices picked up $1.80 to $1,929.10 U.S. an ounce.