TORONTO — Canada's main stock index was down almost 1.3 per cent Tuesday with broad-based losses led by technology, healthcare and financials, while U.S. stock markets slid more than two per cent.
The S&P/TSX composite index was down 262.60 points at 20,252.64.
In New York, the Dow Jones industrial average was down 697.10 points, or 2.1 per cent, at 33,129.59. The S&P 500 index was down 81.75 points, or two per cent, at 3,997.34, while the Nasdaq composite was down 294.97 points, or 2.5 per cent, at 11,492.30.
The early rally of 2023 that was driven by decelerating inflation is now encountering choppier waters, said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management.
Data released Tuesday showed that annual inflation in January was 5.9 per cent compared with 6.3 per cent in December.
Though Canadian CPI data released Tuesday revealed the inflation rate was actually lower than expected — in theory good news — markets seem to be grappling with questions about what that means for the economy, said Burkett.
“That battle appears to have been fought and won,” he said. “So the question is, what happens next?”
Burkett noted that riskier assets, in particular tech, were dragging markets down today, which is likely why U.S. markets were down by larger percentages than the TSX, which isn’t as heavily weighted towards tech.
There are two main paths forward that the market is grappling with, Burkett said.
“One of those paths looks pretty nasty. The other one looks quite comfortable, but it’s maybe not realistic,” he said.
“I think that the markets are kind of taking stock of … what the coming year will bring.”
The Canadian dollar traded for 73.99 cents UScompared with 74.15 cents US on Friday.
The financial index on the TSX was down 1.39 per cent, while the information technology fell almost two per cent, and healthcare was down 4.67 per cent.
The April crude oil contract was down 19 cents at US$76.36 per barreland the April natural gas contract was down 18 cents at US$2.18 per mmBTU.
The April gold contract was down US$7.70 at US$1,842.50 an ounceand the March copper contract was up 12 cents at US$4.23 a pound.
This report by The Canadian Press was first published Feb. 21, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
