Canadian Stocks Turning In Mixed Performance After BoC Rate Decision

(RTTNews) - Canadian stocks are turning in a mixed performance on Wednesday, with investors digesting the Bank of Canada's interest rate decision, and assessing the latest batch of economic data from across the globe and the likely impact the tighter monetary policy from central banks might have on global growth.

The Bank of Canada today hiked its interest rates by 75 basis points to a 14-year high, and said the policy rate would need to go higher still given the fight against raging inflation.

The Canadian central bank raised its target for the overnight rate to 3.25%, with the Bank Rate at 3.5% and the deposite rate at 3.25%. The bank also said it is continuing its policy of quantitative tightening.

The 75 basis point rate hike marks the fifth straight increase in interest rates by the Bank of Canada and follows a 100 basis point rate hike in July.

"As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target," the Bank of Canada said.

The bank added, "The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target."

Shares from materials and healthcare sectors are among the prominent gainers. Several stocks from utilities, consumer discretionary and industrials sectors are also faring well. A few stocks from the technology sector are notably higher, while energy stocks are weak.

The benchmark S&P/TSX Composite Index, which dropped to 18,981.97, is up 58.03 points or 0.3% at 19,146.18 about a quarter past noon.

Canada Goose Holdings (GOOS.TO) is rising nearly 8%. Bombardier Inc (BBD.B.TO), Wheaton Precious Metals (WPM.TO), Lithium Americas Corp (LAC.TO), Franco-Nevada Corp (FNV.TO), Agnico Eagle Mines (AEM.TO), Waste Connections (WCN.TO), Colliers International Group (CIGI.TO) and Fairfax Financial Holdings (FFH.TO) are gaining 1.3 to 4%.

Vermilion Energy (VET.TO), Paramount Resources (POU.TO), Enerplus Corporation (ERF.TO), Teck Resources (TECK.A.TO), Laurentian Bank (LB.TO), Rogers Communications (RCI.A.TO) and Imperial Oil (IMO.TO) are down 2 to 5%.

Data from Statistics Canada showed Canada posted a trade surplus of C$ 4.1 billion in July of 2022, narrowing from a downwardly revised surplus of C$ 4.9 billion in the previous month.

Exports fell by 2.8% to C$ 68.3 billion in July, the first monthly decrease in 2022. Imports dropped by 1.8% to C$ 64.2 billion, the data showed.