By Johann M Cherian and Fergal Smith
(Reuters) -Canada's benchmark stock index fell on Thursday to its lowest closing level in nearly two months, tracking declines on Wall Street as investors grew nervous ahead of the release of U.S. and Canadian employment reports on Friday.
The Toronto Stock Exchange's S&P/TSX composite index ended down 259.81 points, or 1.3%, at 20,086.72, its lowest close since Jan. 11.
Wall Street's major indexes also posted steep declines as investors worried that the U.S. jobs report for February could spur aggressive interest rate hikes by the Federal Reserve.
Markets have been on edge after Fed Chair Jerome Powell delivered a message this week of higher and potentially faster rate hikes.
The Bank of Canada needs more evidence to gauge if interest rates are high enough to tame inflation, in part because the economies of major trading partners are doing better than forecast, Senior Deputy Governor Carolyn Rogers (NYSE:ROG) said.
On Wednesday, the BoC left its policy rate on hold at 4.50%.
Financials, the most heavily weighted sector on the TSX, fell 1.8%, while both consumer discretionary and materials, which includes precious and base metals miners and fertilizer companies, ended 1.7% lower.
Linamar Corp slumped 13.7% after the auto parts manufacturer missed quarterly profit estimates.
Nuvei Corp was a bright spot. It rose 6.6% after Credit Suisse upgraded the stock to "outperform" from "neutral".