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TSX hits a 2-week low as Fed projections rattle investors

Published 09/21/2022, 06:54 AM
Updated 09/21/2022, 04:57 PM
© Reuters. The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019.   REUTERS/Chris Helgren
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell on Wednesday to its lowest level in more than two weeks, including declines for energy and financial shares, as the U.S. Federal Reserve delivered another supersized interest rate hike to tackle inflation.

The Toronto Stock Exchange's S&P/TSX composite index ended down 184.15 points, or nearly 1%, at 19,184.54, its lowest closing level since Sept. 6.

Wall Street's main indexes also lost ground as the Fed lifted its policy rate by 75 basis points to a 3.00-3.25% range and signaled more large increases to come in new projections showing its policy rate rising to 4.40% by the end of this year.

"The Fed is not taking any chances with inflation and they are prepared to send this economy into a recession," Edward Moya, senior market analyst at OANDA in New York, said in a note.

The energy sector fell 2.3% as the Fed's hawkish message offset concerns of tighter oil and gas supply after an escalation of the war in Ukraine. U.S. crude oil futures settled 1.2% lower at $82.94 a barrel.

© Reuters. The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019.   REUTERS/Chris Helgren

Heavily-weighted financials lost 1.2%, while the materials group, which includes precious and base metals miners and fertilizer companies, ended 0.2% lower.

It included a 4.4% decline for the shares of Teck Resources (NYSE:TECK) Ltd after the company reported a plant outage at its Elkview steelmaking coal operation.

(Reporting Fergal Smith; Additional reporting by Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva and Alistair Bell)

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