TORONTO — Canada’s main stock index on Tuesday tumbled to its lowest level in nearly seven weeks, pressured by hawkish comments from Federal Reserve Chair Jerome Powell and worries that existing vaccines may not hold up against the COVID-19 Omicron variant.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 489.01 points, or 2.3%, at 20,659.99, its biggest decline since October 2020 and its lowest closing level since Oct. 13. For the month, it lost 1.8%.
“Canada is basically getting caught up in a general pullback in equity markets around the world,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
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Wall Street’s main indexes fell after Powell signaled that the U.S. central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase, piling pressure onto a market already nervous about the variant.
The CEO of drugmaker Moderna warned that COVID-19 vaccines are unlikely to be as effective against the variant.
U.S. crude oil futures settled 5.4% lower at $66.18 a barrel, while the TSX’s energy sector lost 2.9%.
The heavily weighted financials group ended 2.8% lower even as Bank of Nova Scotia kicked off Canadian banks’ fourth-quarter results reporting with better-than-expected profits driven by lower provisions.
Technology declined 2.1% and industrials were down 2.2%.
Domestic economic data was encouraging, showing the economy growing an annualized rate of 5.4% in the third quarter, but gained little traction with stock market investors.
“Q3 is quite a ways back in the rearview mirror … the market is focusing on other things now,” Cieszynski said. (Reporting by Fergal Smith; Additional reporting by Susan Mathew and Anisha Sircar in Bengaluru; Editing by Sandra Maler)
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