CANADA STOCKS-Toronto market dips for second day as Canada Goose slumps
TSX ends down 10.61 points, or 0.1%, at 20,740.44
Energy falls 2.8%; oil settles 0.7% lower
Canada Goose tumbles 23.7%
Technology rallies 2.2%
(Adds details throughout, updates prices)
By Fergal Smith
Feb 2 (Reuters) – Canada’s main stock index edged lower on Thursday as losses in commodity-linked stocks offset gains in technology, while Canada Goose’s shares crumbled after the luxury goods maker cut its full-year forecast.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 10.61 points, or 0.1%, at 20,740.44. It was the index’s second straight day of modest losses after posting on Tuesday its highest closing level in nearly eight months.
“We wouldn’t be surprised to see some back and fill of overbought levels, but we are constructive intermediate term,” said Joseph Abramson, co-chief investment officer at Northland Wealth Management.
“I think you’ve seen the peak of the valuation compression because we think that interest rate expectations have peaked both in Canada and the US”
Global central banks that raced to raise interest rates last year amid soaring inflation are now laying the groundwork in unison for a pause that, while not yet promised, is coming into view for later this year.
The Bank of Canada has already signaled a pause, after it hiked its benchmark interest rate last week to a 15-year high of 4.50%.
“Earnings are going to be weak for a little while, but most of that has been discounted,” Abramson said.
The energy sector fell 2.8% as oil futures settled 0.7% lower at $75.88 a barrel, while the materials group, which includes precious and base metals miners and fertilizer companies, was down 1.9%.
Shares of Canada Goose Holdings Inc tumbled 23.7%. The company trimmed its full-year revenue and profit forecasts after COVID-19 disruptions weighed on sales of its parkas and jackets in China during the third quarter.
The technology sector helped cap the TSX’s decline. It ended 2.2% higher, adding to its recent gains.
Industrials were also a bright spot, rising 1%, and heavily-weighted financials were up 0.6%. (Reporting by Fergal Smith; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Marguerita Choy and Shailesh Kuber)