Canadian Market Slips After Fed Hikes Interest Rate By 0.75%

(RTTNews) - The Canadian market, which opened on a positive note Wednesday morning and held above the unchanged line till a little while ago, slipped into negative territory after the Federal Reserve raised interest rates by 0.75%, the biggest hike at a single meeting since 1994.

It may be recalled that Fed Chairman Jerome Powell had said recently that the central bank was not considering a 0.75% hike and signaled that a 0.5% raise would be appropriate at the June and July meetings.

The terribly hot inflation data last week that showed the consumer price index increased 8.6% in May, the largest year-on-year increase in over 40 years, has prompted the central bank to hike rates by a quarter percentage more than the widely expected 0.5% increase.

Energy stocks are among the prominent losers. Materials and utilities shares are also weak. Consumer discretionary, technology, healthcare and real estate stocks are faring well. Industrials and financials shares are mostly flat.

The benchmark S&P/TSX Composite Index has dropped to 19,455.96, losing 92.55 points or 0.47%. The index had earlier climbed to 15,713.36.

TC Energy Corp (TRP.TO), Imperial Oil (IMO.TO), Boyd Group Services (BYD.TO), Canadian Natural Resources (CNQ.TO), Precision Drilling Corporation (PD.TO) and Fairfax Financial Holdings (FFH.TO) are down 1 to 2.3%.

Bombardier Inc (BBD.B.TO) is soaring more than 16%. Shopify Inc (SHOP.TO) is gaining about 5.3%, while Magna International (MG.TO), Linamar Corp (LNR.TO), Nuvei Corp (NVEI.TO), BRP Inc (DOO.TO), Kinaxis Inc (KXS.TO), Descartes Systems Group (DSG.TO), CargoJet (CJT.TO) and TFI International (TFII.TO) are up 1 to 3%.

On the Canadian economic front, data from the Canada Mortgage and Housing Corporation showed housing starts in the country jumped by 8% over a month earlier to 267,330 units in April 2022.