Canadian Market Notably Lower After BoC Announcement, U.S. Inflation Data

(RTTNews) - The Canadian market is down firmly in negative territory Wednesday morning, with stocks from across various sectors reeling under a fairly severe bout of selling pressure on hot U.S. inflation data, and the Bank of Canada's statement that the central bank will continue with quantitative tightening.

The BoC decided to leave interest rates unchanged, saying inflation is still "too high." The central bank held its target for the overnight rate at 5%, with the bank rate at 5.25% and the deposit rate at 5%.

The accompanying statement said inflation is still "too high" but noted consumer price inflation and core inflation have eased further in recent months.

The central bank said its Governing Council will be looking for evidence the downward momentum for inflation is sustained.

The central bank said it expects consumer price inflation to be close to 3% during the first half of this year, move below 2.5% in the second half and reach its 2% inflation target in 2025.

The bank expected Canadian GDP to grow by 1.5% in 2024, 2.2% in 2025 and 1.9% in 2026.

The benchmark S&P/TSX Composite Index, which dropped to a low of 22,099.19 earlier in the session, is down 128.22 points or 0.56% at 22,233.56 nearly an hour before noon.

Dayforce Inc (DAY.TO), Colliers International (CIGI.TO), CargoJet (CJT.TO), Magna International (MG.TO) and Shopify Inc (SHOP.TO) are down 2 to 4%.

Bank of Montreal (BMO.TO), EQB Inc (EQB.TO), Restaurant Brands International (QSR.TO), TFI International (TFII.TO) and Royal Bank of Canada (RY.TO) are lower by 1 to 2%.

Among the gainers, Aurora Cannabis (ACB.TO) is soaring 12.5%. Teck Resources (TECK.B.TO), Cameco Corporation (CCO.TO), Imperial Oil (IMO.TO) and Tourmaline Oil Corporation (TOU.TO) are up 2 to 3%.

Dollarama (DOL.TO), Fairfax Financial Holdings (FFH.TO), Wheaton Precious Metals (WPM.TO) and Canadian National Railway (CNR.TO) are also notably higher.

Data from the Labor Department showed U.S. consumer prices advanced by slightly more than expected in the month of March, climbing by 0.4%, matching the increase seen in February. Economists had expected consumer prices to rise by 0.3%.

The report also said the annual rate of consumer price growth accelerated to 3.5% in March from 3.2% in February. Economists had expected a more modest acceleration to 3.4%.

Meanwhile, the total value of building permits in Canada increased by 0.3% over a month to $11.8 million in February, following a downwardly revised 12.9% surge in January, data from Statistics Canada showed.