The S&P/TSX Composite Index fell nearly 1% on Thursday, slipping below 36,000 to a five-week low, as rising oil prices and higher bond yields intensified inflation concerns. Crude prices surged amid mounting fears of prolonged energy supply disruptions, following the largest wave of attacks on shipping in the Strait of Hormuz by Washington and Tehran on Wednesday. At the same time, global bond yields moved higher on worries that inflation will remain elevated, after US producer price inflation (PPI) came in hotter than expected and ahead of Friday’s consumer price index (CPI) release.
Growing expectations of another Federal Reserve rate hike weighed on rate-sensitive sectors, with most major Canadian banks trading in negative territory. Weakness in precious metals added further pressure: declining gold prices dragged down miners, with Agnico Eagle off 2.5%, Wheaton Precious Metals (WPM) down 3%, and Barrick Gold losing more than 2%. Copper prices also retreated, pushing Hudbay Minerals lower by more than 7.5%.
In energy infrastructure, Enbridge fell more than 3% after announcing an agreement to acquire Tallgrass Energy’s crude oil business, including a majority stake in the Pony Express Pipeline and related assets.
