Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

MarketScreener Homepage  >  Indexes  >  Toronto Stock Exchange  >  S&P/TSX Composite index    0000   XC0009695252

My previous session
Most popular
Delayed Quote. Delayed  - 10/19 07:50:16 pm
15539.76 PTS   +0.88%
09/28LIVESTOCK HIGHL : Top Stories of the Day
09/17GRAIN HIGHLIGHT : Top Stories of the Day
09/12Canadian miner New Gold explores sale, sources say
News SummaryAll newsNews of the components ofTweets

Canadian currency and bond yields surge, stocks fall after rate hike

share with twitter share with LinkedIn share with facebook
share via e-mail
09/06/2017 | 10:44pm CEST
A Canadian dollar coin, commonly known as the

TORONTO (Reuters) - Canada's currency surged to its strongest level in two years, short-term bond yields hit a five-year high and the country's main stock index slipped on Wednesday after the Bank of Canada surprised many by raising interest rates.

The local stock market turned negative as investors retreated from rate-sensitive sectors including telecoms and utilities, which typically issue debt to pay for projects and pay out dividends that become less attractive when government bond yields rise.

The central bank hiked rates for the second time this year at a time when Canadian consumers have loaded up with near-record debt and the housing market has cooled. Some worry that a strengthening currency could make Canadian manufacturers less competitive.

"The Bank made very little attempt to push back against the strength of the Canadian dollar and also very little attempt to suggest that this is merely (removing) two insurance cuts and then we are on hold for a while," said Bipan Rai, senior macro strategist at CIBC Capital Markets, referring to a pair of 2015 rate cuts intended to combat the effect of plunging oil prices.

"As a result we have got the market pricing in potentially another rate hike before the end of this year and the strength of the Canadian dollar reflects that," he said, adding that the currency pair could be heading back toward C$1.20.

The Bank of Canada, which also increased rates in July, left the door open to more hikes in 2017. It is the only major central bank besides the U.S. Federal Reserve that has been raising rates.

The Canadian dollar surged as much as 2.2 percent to post its strongest since June 2015 at C$1.2140.

The yield on 2-year government debt <CA2YT=RR> jumped as much as 10 basis points to its highest since April 2012 at 1.450 percent.

"There is some concern that a rate hike is too much too fast," said Shailesh Kshatriya, director for Canadian strategies at Russell Investments Canada.

The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 30.32 points, or 0.2 percent, at 15,059.83. It had notched solid gains before the rate announcement.

Investors worried that the sharp appreciation of the Canadian dollar would hurt prospects for producers of commodities priced in U.S. dollars.

"A rising Canadian dollar without a really good lift from energy prices is tough on the energy sector, and it's tough on any commodity producers," said John Johnston, chief strategy officer at Davis-Rea.

Manufacturing exporters are already "under the gun" due to an uncertain outlook for the North American Free Trade Agreement, Johnston added.

Canada, Mexico and the United States made progress in talks to update the NAFTA trade pact, top officials said, a relief after repeated criticism by U.S. President Donald Trump. However, the round did not delve deeply into the toughest issues.

Data on Wednesday showed Canada's exports dropped 1.1 percent in volume terms in July.

The rate hike seemed to unsettle those holding shares of the country's banks, whose earnings growth depends in part on homebuyers taking out more loans. The sector reversed early gains to trade 0.2 percent lower.

(Reporting by Alastair Sharp and Fergal Smith; Editing by Meredith Mazzilli and David Gregorio)

By Alastair Sharp and Fergal Smith

share with twitter share with LinkedIn share with facebook
share via e-mail
09/28LIVESTOCK HIGHLIGHTS : Top Stories of the Day
09/17GRAIN HIGHLIGHTS : Top Stories of the Day
09/12Canadian miner New Gold explores sale, sources say
09/05CRESCENT POINT ENERGY : names new CEO, plans to cut 17 percent of workforce
08/09Canada Goose shares jump on smaller-than-expected loss
06/06Oil vs wild rice - Enbridge, opponents gear up final U.S. pipeline push
06/06OIL VS WILD RICE : Enbridge, opponents gear up final U.S. pipeline push
05/24TSX : Electric vehicles seen driving cobalt crunch by mid-2020s
05/15TSX edges lower as NAFTA deal hopes ebb, gold prices drop
05/11TSX gains on tepid jobs data, rise in gold prices
More news
News of the components of S&P/TSX COMPOSITE INDEX
08:01pCANADIAN PACIFIC RAILWAY : CP announces TSX acceptance of previously announced s..
08:01pElement Fleet Schedules Third Quarter 2018 Financial Results and Conference C..
06:43pCAMECO : Provides Date for Q3 Results and Conference Call
05:55pSNC LAVALIN : writes letter in bid to rally public support over criminal charges
05:44pSTANTEC : strikes deal to sell international construction arm to L.A. purchaser
04:49pDREAM GLOBAL REIT : October 2018 Monthly Distribution
04:24pLOBLAW : Announces Timing of Third Quarter 2018 Earnings Release
More news
Duration : Period :
S&P/TSX Composite index Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends S&P/TSX COMPOSITE INDEX
Short TermMid-TermLong Term
BAYTEX ENERGY CORP 2.99 Delayed Quote.6.03%
ALTAGAS LTD 21.51 Delayed Quote.4.93%
DETOUR GOLD CORPORATION 11.28 Delayed Quote.4.44%
METRO, INC. 41.47 Delayed Quote.3.93%
BADGER DAYLIGHTING LTD 27.28 Delayed Quote.3.88%
BRP INC 55.7 Delayed Quote.-4.36%
CANOPY GROWTH CORP 61.02 Delayed Quote.-4.57%
SHOPIFY INC (US) 168 Delayed Quote.-4.58%
AURORA CANNABIS INC 13.1 Delayed Quote.-4.80%
APHRIA INC 18.47 Delayed Quote.-5.04%
Heatmap :