Canadian Market Down Marginally After BoC Raises Interest Rate

(RTTNews) - The Canadian market is down marginally around late morning on Wednesday, with investors digesting the Bank of Canada's decision to raise interest rates by 25 basis points.

The Canadian central bank this morning increased its target for the overnight rate by 25 basis points to 4.75%, citing stubbornly high inflation and strong than expected economic growth.

The BoC, which had left interest rates unchanged for two straight meetings, said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. The central bank reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

The bank's Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.

Technology stocks are notably lower. Several stocks from healthcare, consumer staples and consumer discretionary sectors are also weak. Energy stocks are gaining, tracking higher crude oil prices.

The benchmark S&P/TSX Composite Index is down 37.00 points or 0.19% at 20,018.60 a few minutes before noon. The index, which climbed to 20,149.95 just before the announcement of the rate decision, dropped to 19,994.29 subsequently.

Among technology stocks, Hut 8 Mining Corp (HUT.TO) is down 3.7% and Shopify Inc (SHOP.TO) is lower by about 3.1%. BlackBerry (BB.TO), Quarterhill (QTRH.TO), Open Text Corp (OTEX.TO) and Descartes Systems Group (DSG.TO) are down 2 to 2.2%. Kinaxis (KXS.TO) and Converge Technology Solutions (CTS.TO) are also notably lower.

Healthcare stocks Tilray Inc (TLRY.TO) and Canopy Growth Corporation (WEED.TO) are down 2.5% and 2%, respectively. Bausch Health Companies (BHC.TO) is down 0.7%.

Consumer discretionary stocks Sleep Country Canada Holdings (GOOS.TO), Restaurant Brands International (QSR.TO) and MTY Food Group (MTY.TO) are down 2.4%, 2.2% and 1.9%, respectively.

Data from Statistics Canada showed, Canada posted a trade surplus of C$ 1.94 billion in April of 2023, wider than the downwardly revised surplus of C$ 0.23 billion in the previous month. Exports jumped by 2.5% to C$ 64.8 billion, while imports fell by 0.2% to C$ 62.9 billion.