TSX down after hot inflation data and dismal Shopify forecast


Feb 16 (Reuters) – Canada’s main stock index fell on Wednesday after national data showing the annual inflation rate accelerated in January raised fears of a faster rise in interest rates and Gloomy forecasts from Shopify Inc rocked sentiment.

As of 9:41 a.m. ET (2:41 p.m. GMT), the Toronto Stock Exchange‘s S&P/TSX Composite Index (.GSPTSE) was down 91.8 points, or 0.43%, at 21,410.75. tech stocks (.SPTTTK) leading the losses.

Canada’s annual inflation rate accelerated to 5.1% in January, the highest rate since September 1991, according to Statistics Canada. While analysts in a Reuters poll had forecast annual inflation to remain at 4.8%. Read more

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This led the Canadian dollar to appreciate against its US counterpart on Wednesday. Read more

“The currency is starting to move a bit, and that’s just an indication that the Bank of Canada will raise rates at the next meeting,” said Gregory Taylor, portfolio manager at Purpose Investments.

“The big question will be how aggressive they become on this path, whether they go from 25 to 50 basis points or whether they signal that they are going to do more throughout the year.

Bank of Canada Governor Tiff Macklem said earlier this month that interest rates needed to rise to fight inflation. Read more

Tech stocks fell 4.2%, led by a 16.5% decline in Shopify Inc (SHOP.TO) after the company forecast slower revenue growth in the first half. Read more

The sector has been further pressured by expectations of rate hikes, as this makes future revenue streams from technology and other high-growth sectors less valuable to investors.

The energy sector (.SPTTEN) climbed 2% and the materials sector (.GSPTTMT) 1.5%, helped by firming commodity prices.

In a bright spot, Barrick Gold Corp (ABX.TO) gained 4.5% after the miner announced a stock buyback of up to $1 billion and a larger dividend payout, fourth-quarter results from the gold miner that beat analysts’ estimates. Read more

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Reporting by Amal S in Bengaluru; Editing by Amy Caren Daniel

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