RBC, Scotiabank, TD downgraded by Barclays pulling TSX lower
Royal Bank hit by double downgrade
Canada’s main stock index fell on May 9, weighed down by financial stocks after Barclays downgraded several banks, while investors remained cautious ahead of U.S. inflation data due on May 10.
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At 10:34 a.m. ET (1434 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 74.34 points, or 0.36 per cent, at 20,510.81.
The TSX’s financial index fell one per cent after Barclays downgraded three major Canadian banks. Royal Bank of Canada fell 1.7 per cent on Barclays’ double downgrade to “underweight” from “overweight.”
Bank of Nova Scotia and Toronto-Dominion Bank fell 2.7 per cent and 1.4 per cent, respectively, on the brokerage’s rating cuts.
Investors will parse the U.S. April consumer price index (CPI) data for signs on the United States Federal Reserve’s policy outlook in what markets expect to be the end of a historic series of interest rate hikes.
“Coming into this earnings season, the bar was set pretty low both in Canada and in the U.S.,” said Allan Small, senior investment advisor at Allan Small Financial Group.
“Overall earnings season has been very good, beating a low bar but still not the number one driver of market movements, that’s more to do with the Fed and interest rate policy.”
Canadian earnings season will pick up the pace this week.
Pet Valu Holdings Ltd. fell 4.8 per cent after the retailer reported a decline in first-quarter profit versus a year earlier.
Finning International Inc. gained 4.5 per cent after the caterpillar equipment dealer posted better-than-expected first-quarter results.
Canada’s technology sector slipped 0.1 per cent, dragged down by a 1.2 per cent in Shopify Inc.
© Thomson Reuters 2023
