TSX ends 2.03 points lower at 20,629.55
Magna shares fall 7.2%
Technology declines 1.1%
Court rejects antitrust effort to block Rogers-Shaw deal
Jan 24 (Reuters) -
Canada's main stock index edged slightly lower on Tuesday,
pressured by a sharp drop in the shares of Magna International
Inc and worries that higher borrowing costs would weigh
on the corporate earnings outlook.
The Toronto Stock Exchange's S&P/TSX composite index
ended down 2.03 points at 20,629.55, after posting on
Monday its highest closing level in more than seven months.
The U.S. benchmark index S&P 500 also ended slightly
"The issue for 2023 is going to be watching the lagged
effects of the interest rate hikes that occurred last year,"
said Brian Madden, chief investment officer at First Avenue
Investment Counsel in Toronto.
"The bigger issue for Canada and the U.S. is going to be
not so much digesting the rate hikes but resetting expectations
for corporate earnings because they are too high, given the
Investors worry that aggressive interest rate hikes
could trigger a recession, with data on Tuesday showing that
U.S. business activity
for the seventh consecutive month in January.
The Bank of Canada will hike its key interest rate by a
quarter of a percentage point to 4.5% on Wednesday and then hit
pause on its tightening campaign, a Reuters poll of economists
Shares of Magna slumped 7.2% after the automotive
supplier cut its earnings margin outlook. That weighed on the
consumer discretionary sector, which lost 0.7%.
Technology fell 1.1% and energy was down 1% as U.S.
crude oil futures settled 1.8% lower at $80.13 a barrel,
giving back some of its recent gains.
A Canadian court
dismissed the competition bureau's effort to block Rogers
Communications Inc's C$20 billion ($14.9 billion) bid
to buy Shaw Communications Inc, in a boost to the
companies' efforts to close a deal struck nearly two years ago.
Rogers rose 2.9% and Shaw was up 2.8%.
(Reporting by Fergal Smith; Additional reporting by Shashwat
Chauhan in Bengaluru; Editing by Krishna Chandra Eluri and Deepa