Canada stocks-TSX falls to five-week low as higher oil prices, bond yields dent sentiment
EWC•Oil, yields and metals weigh on miners
- Oil prices jumped 4%, with the West Texas Intermediate crude futures CLc1 surging past $100 a barrel for the first time since May 21, as fears of prolonged energy supply disruption heightened. O/R
- U.S. producer prices increased largely in line with expectations in August amid a rebound in the cost of energy products.
- Rising yields and escalating tensions in the Middle East have rekindled fears of prolonged inflation, with investors keenly awaiting the U.S. consumer price index report due on Friday.
- "As the conflict with Iran drags on longer than many expected, inflation pressures are becoming increasingly entrenched, leaving investors in search of a catalyst strong enough to change the inflation narrative," said Jeffrey Roach, chief economist for LPL Financial.
- Traders are pricing a 70% chance of a rate hike, up from 62% before the producer inflation data, according to the CME Group's FedWatch Tool.
- Gold prices declined as a result, while copper prices fell the most in nearly four months after Reuters reported the White House has yet to decide on refined copper tariffs.
- Miners led losses on the benchmark with Capstone Copper CS.TO and Hudbay Minerals HBM.TO down 8.1% and 7.5%, respectively.
TSX falls to lowest level in more than a month
Canada's main stock index fell to its lowest in more than a month on Thursday, as rising oil prices and higher bond yields fueled concerns about persistent inflation, while weaker precious metal and copper prices added further pressure.
The S&P/TSX Composite Index .GSPTSE fell 0.9% to 35,583.89 points as of 10:19 a.m. ET, its lowest since August 4, with the industrials sector .GSPTTIN among the only gainers.
The benchmark index was on track for its fourth straight session of losses, its longest losing streak since late April.
