April 25 (Reuters) – Canada’s main stock index hit a two-month low on Monday, dragged down by energy and material stocks, as worries about the fallout from China’s COVID-19 outbreak knocked oil and metal prices lower.
By 10:28 a.m. ET (14:28 GMT), the Toronto Stock Exchange’s S&P/TSX composite index had fallen 1.6% to 20,854.23.
The benchmark has lost more than 6% since hitting a record high on April 5, getting pulled into a global stocks selloff on concerns about aggressive interest rate hikes by the U.S. Federal Reserve, soaring inflation and the Ukraine crisis denting economic growth.
The energy sector dropped 4.4%, on course for its worst day in nearly five months, as the price of oil, one of Canada’s top exports, slumped 5% on growing concerns that prolonged COVID lockdowns in Shanghai will hurt global growth and energy demand.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 3.2% as gold futures tumbled 2%, dented by a stronger dollar.
Canada’s stock market, home to big miners and energy companies, has been among the few outperfomers this year as a raging conflict in Ukraine drove commodity prices to multi-year highs earlier this year.
However, markets have come under pressure recently on concerns that surging inflation and quicker interest rate hikes will slow economic growth.
Bank of Canada Governor Tiff Macklem said last week that the central bank could consider a larger rate increase than the half-point move it made earlier this month, as it grapples with reining in inflation which is at a 31-year high.
Among single stocks, toy manufacturer Spin Master Corp jumped 4.4% after Bank of Montreal upgraded the stock to “outperform.” (Reporting by Sruthi Shankar in Bengaluru; Editing by Shailesh Kuber)