Make Kitco Your Homepage

Off The Wire

TSX flat on stagflation worries, Saputo eyes worst day in three years

Kitco News

June 6 (Reuters) - Canada's main stock index traded flat on Friday, as job data raised concerns about the country falling into a combination of economic slowdown and higher inflation, while food processing company Saputo dragged the benchmark on its cautious forward looking statement.

A Statistics Canada report showed the economy unexpectedly shed jobs in May and the unemployment rate rose for the first time in nine months, in a rare sign of job market softness particularly in the services sector.

"Today's report suggests stagflation may be taking hold," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

"Wage inflation remaining stubbornly high and sticky supports the BoC's surprise decision to raise interest rates earlier this week."

Saputo Inc (SAP.TO) fell 10.7%, its worst day in over three years, after the food processing firm said it expects its international division to be negatively impacted by lower product prices in the coming year.

It pushed the consumer staples sector (.GSPTTCS) down 1.3%.

Lundin Mining Corp (LUN.TO) slid 1.1% after a Chilean environmental court extended its order that will prevent Canadian miner from reopening its Alcaparrosa copper mine, which the court closed nearly a year ago after a gaping sinkhole opened in a nearby village.

Materials sector (.GSPTTMT) shed 0.6%.

At 10:11 a.m. ET (14:11 GMT), the Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was up 2.69 points, or 0.01%, at 19,945.39.

The commodity-heavy index is set to end the week slightly lower as investors stayed on the sidelines ahead of the much-awaited U.S. Federal Reserve's rate decision due next week.

Investors are also closely watching for clues on further interest rate hikes by the Bank of Canada following a surprise rise in the benchmark rate to 4.75%, its highest in over two decades, in latest policy meeting on Wednesday.

In a bright spot, Eldorado Gold Corp (ELD.TO) added 0.9%, after brokerage BMO resumed coverage on the stock with an "outperform" rating.

Reporting by Johann M Cherian and Shubham Batra in Bengaluru
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.