The Toronto Stock Exchange's S&P/TSX composite index ended down 132.59 points, or 0.6%, at 21,461.93, after five straight days of gains. Wall Street also ended lower.
To tackle inflation, the Federal Reserve and the Bank of Canada "may be forced to hike rates at a faster pace," said Sid Mokhtari, a market technician at CIBC World Markets. "Money is not going to be as cheap as it used to be."
U.S. consumer prices rose at an annual rate of 6.2% in October, the biggest gain in 31 years, as Americans paid more for gasoline and food.
"I don't think this is going to change the secular picture for broader equities but in the short-term I would say you are getting a knee-jerk effect," Mokhtari said.
On Tuesday, the Toronto market notched a record closing high of 21,594.92 after higher commodity prices and buoyant corporate profits helped underpin the market in recent weeks.
The technology sector on Wednesday fell 3.1% as bond yields jumped. Higher yields tend to weigh on companies with high growth prospects, reducing the value of future cash flows.
Energy shares ended 2.2% lower, pressured by a drop in oil prices. U.S. crude oil futures settled 3.3% lower at $81.34 a barrel.
Boyd Group Services Inc shares fell 10.1% after the auto repair services company reported third-quarter adjusted profit below estimates.
Limiting the Toronto market's decline was a 1% gain for the materials sector, which includes precious and base metals miners and fertilizer companies. It was fueled by a rally in gold, considered a hedge against rising prices. [GOL/]
(Reporting by Fergal Smith in Toronto; Additional reporting by Amal S in Bengaluru; Editing by Matthew Lewis)
By Fergal Smith
