The Canadian stock market fell sharply on Wednesday after the Bank of Canada (BoC) kept its benchmark interest rate unchanged at 2.25% and signalled that policymakers remain cautious about the inflationary impact of elevated energy prices and ongoing geopolitical uncertainty. Policy-related uncertainty, coupled with big intraday declines in gold and silver prices, drove the S&P/TSX Composite Index down by 260 points, or 0.8%, to 34,151.
While a recovery in oil prices helped energy stocks rebound, with some utility and technology shares also showing strength, steep losses in sectors like mining and industrials outweighed those gains and pressured the TSX benchmark.
The central bank acknowledged that Canada’s economy remains weak and operating with excess capacity, but warned that inflation is expected to stay near 3% in the coming months as higher oil prices continue to filter through the economy.
The Bank of Canada continues to hold interest rates steady
In its latest statement, the BoC highlighted the difficult balance between supporting growth and preventing inflation from becoming entrenched, with Governor Tiff Macklem noting that persistent energy-driven price pressures could even require additional rate hikes if they begin to spread more broadly across the economy.
The hawkish tone weighed on investor sentiment, especially as markets reassessed the possibility of near-term monetary easing.
Top TSX Composite movers and active stocks
Seabridge Gold, Wesdome Gold Mines, Finning International, and Toromont Industries were the worst-performing TSX stocks for the day, with each plunging by at least 7.4%.
North West Company (TSX: NWC) was also among the Toronto Stock Exchange’s bottom performers, as its shares dived by 6.6% to $49.83 apiece. This selloff in NWC stock came after the retailer posted a 1.5% year-over-year decline in its first-quarter sales to $631.6 million, with weaker Canadian operations weighing on overall performance.
While North West’s reported net earnings rose 5.4% to $29.2 million, its adjusted net earnings fell 9.9% from a year ago to $30.3 million. The company also flagged headwinds from reduced funding under Inuit Child First and Jordan’s Principle programs, higher operating costs, and rising fuel expenses. These softer underlying earnings trends and ongoing pressure on its Canadian business dampened investor sentiment.
On the flip side, Constellation Software, Strathcona Resources, Kelt Exploration, and South Bow climbed by at least 4.5% each, making them the day’s top-performing TSX stocks.
Based on their daily trade volume, Canadian Natural Resources, Telus, Cenovus Energy, Barrick Mining, and Enbridge were the five most active stocks on the exchange.
TSX today
Commodity prices across the board saw heightened volatility in early trading on Thursday, giving no clear direction to the resource-heavy TSX index at the open today.
With no major domestic economic releases due, Canadian investors may want to keep an eye on the latest U.S. wholesale inflation data this morning.
More importantly, Canadian investors will monitor the latest escalation between the U.S. and Iran after Washington recently launched a second round of strikes on Iranian military targets and Tehran claimed retaliatory attacks on U.S. bases in Kuwait and Bahrain. Any further disruption around the Strait of Hormuz could quickly lift oil prices and support TSX energy stocks, but it may also deepen inflation concerns and keep broader market sentiment fragile.
On the corporate events side, the TSX-listed discount retailer Dollarama will release its latest quarterly earnings report today.
Market movers on the TSX today
