Energy, Financials Shares Dragging Down Canadian Market

(RTTNews) - The Canadian market is down firmly in negative territory a little past noon on Wednesday with stocks from across various sectors reeling under sustained selling pressure.

Worries about global economic growth and prospects of more interest rate hikes by the Federal Reserve seem to offset data showing fairly strong Canadian economic growth in the first quarter.

Data from Statistics Canada showed the Canadian economy grew by 0.8% in the first quarter of 2023, bouncing back from the stall in the previous quarter. Economists had expected the economy to see a 0.4% growth. On an annualized basis, Canadian GDP expanded by 3.1%.

Investor sentiment is also weighed down due to the weakness on Wall Street, where traders are closely eyeing the developments regarding the bill to raise the U.S. debt ceiling and avoid a potentially disastrous default.

The debt ceiling bill is expected to be voted on in the House later this evening.

The benchmark S&P/TSX Composite Index is down 182.29 points or 0.9% at 19,557.41 about a quarter past noon.

Energy, healthcare, consumer discretionary, industrials and financials shares are notably lower. Materials shares are finding some support.

Energy stocks Crescent Point Energy (CPG.TO), Whitecap Resources (WCP.TO), MEG Energy Corp (MEG.TO), Suncor Energy (SU.TO), Precision Drilling Corp (PD.TO), Cenovus Energy (CVE.TO), Enerplus Corp (ERF.TO) and Paramount Resources (POU.TO) are down 2 to 3%.

Consumer discretionary stocks Linamar Corp (LNR.TO) and Magna International (MG.TO) both are down more than 5%. BRP Inc (DOO.TO), Aritzia Inc (ATZ.TO), Canada Goose Holdings (GOOS.TO) and Gildan Activewear (GIL.TO) are lower by 1.7 to 4%.

Canopy Growth Corp (WEED.TO), down 6%, is the biggest loser in the Health Care Index. Tilray Inc (TLRY.TO) is declining 5.7% and Bausch Health Companies (BHC.TO) is lower by 1.7%.

In the Financials section, National Bank of Canada (NA.TO) is declining 2%. The bank reported second-quarter net income of C$847 million or C$2.38 per share, compared to net income of C$889 million or C$2.53 per share in the prior-year quarter.

Manulife Financial (MFC.TO), Nuvei Corp (NVEI.TO), Goeasy (GSY.TO), Onex Corp (ONEX.TO), Canadian Imperial Bank of Commerce (CM.TO), Bank of Montreal (BMO.TO), Royal Bank of Canada (RY.TO) and Laurentian Bank (LB.TO) are down 1 to 3%.