The Canadian market was decidedly in the red on Thursday afternoon, with stocks across multiple sectors facing ongoing selling pressure, putting the market on a path to a weak closing. Market sentiment was bearish due to uncertainty surrounding potential moves by the Federal Reserve regarding interest rates, a sentiment stoked by data from the US Labor Department showing a larger-than-expected increase in producer price inflation for February.
Different sectors owning communications, materials, consumer discretionary items, healthcare, consumer staples, utilities, and financial shares were weak. However, several stocks from energy and technology sectors showcased notable gains.
The key S&P/TSX Composite Index dipped 159.05 points, translating into a 0.72% drop to close at 21,811.06.
In the United States, the Labor Department revealed that the producer price index for final demand rose by 0.6% in February, a significant leap from the 0.3% rise in January. Economists had predicted just another 0.3% rise. Annual producer price growth also propelled forward, accelerating to 1.6% in February up from a revised 1% in January, surpassing economist expectations of a rise to just 1.1% from the 0.9% reported for the previous month.
On the home front, data from Statistics Canada showed a modest rise in the country's manufacturing sales, which increased by 0.2% to C$ 71.1 billion in January. In contrast, car registrations in Canada took a hit, dropping to 128,193 units in December 2023, down from 143,723 units in November 2023.
In terms of individual stocks, Jamieson Wellness declined a substantial 14%, while Enghouse Systems fell by 5.5% and BCE Inc tumbled by around 4.2%. Other firms including CCL Industries, Magna International, West Fraser Timber, Franco-Nevada Corporation, and WSP Global also faced declines, ranging from 1 to 3%.
