Canadian equities fell in the worst market week in more than two years as investors shied away from riskier assets amid growing concern that hot inflation could trigger a recession.
The S&P TSX Composite Index fell 0.4% on Friday, extending losses to 6.6% this week, the largest drop in the indicator since March 2020, when the pandemic devastated global markets. While Canada’s benchmark index has averted heavy losses from many indexes, companies in the energy, utilities and materials sectors experienced the biggest declines in all sectors as central banks rose their rates. interest rates to try to curb inflation.
“What has hurt Canada is that we are finally seeing the market start to trade in a recession, even for the most cyclical and inflation-sensitive stocks like energy,” said Jason Mann, director of Edgehill Partners Investments, in an interview. “Energy was the last place people hid. It’s been a bearish market where nothing is safe. “
Shares of oil and gas, which have helped strengthen the S & P / TSX this year, fell 14 percent this week. Canadian Natural Resources Ltd and Enbridge Inc. they fell 17 percent and 9.5 percent, respectively, both of which recorded their worst weeks since March 2020. Miners and utilities fell more than 6 percent.
Investors fled the stock markets this week, dragging the S&P 500 index to its first bear market since March 2020 on Monday. Selling worsened on Wednesday as the US Federal Reserve raised interest rates by 75 basis points, the largest increase since 1994.