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CGI jumps on upbeat results
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TC Energy down after raising pipeline costs
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Fed decision awaited
(Updates prices, adds comments and details)
By Shashwat Chauhan
Feb 1 (Reuters) - Canada's main stock index fell on
Wednesday, dragged down by commodity-linked stocks ahead of the
U.S. Federal Reserve's monetary policy decision expected to
result in an interest rate hike.
At 10:21 a.m. ET (1521 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 35.58 points, or
0.17%, at 20,731.8.
The TSX has had a stellar start to the year, recording its
best January performance since 2019, aided by hopes of smaller
rate hikes from the Fed and signs of economic resilience in the
United States and Europe.
"It's been an exceptionally strong year start to the
year," said Elvis Picardo, portfolio manager at Luft Financial,
iA Private Wealth. "On a pivotal day like this (Fed decision),
it's natural to expect some degree of profit taking or position
squaring before the decision comes out."
The U.S. central bank is scheduled to announce its decision
at 14:00 ET and traders are leaning heavily towards a
25-basis-point rate hike.
Investors will scrutinize Fed Chair Jerome Powell's press conference to understand where the Fed stands on future rate increases. "I know the consensus is for a 25-basis-point hike but if they (Fed) reiterate their hawkish stance, traders may begin questioning the wisdom of fighting the Fed," added Picardo. Energy stocks fell 1.2% as oil prices slid, while material stocks dipped 0.2%. Data showed Canadian manufacturing activity expanded in January for the first time in six months as an uptick in domestic demand led to firms increasing production and inflation pressures showed signs of easing. Among individual stocks, CGI gained 6.6% after the information technology company reported better-than-expected first quarter earnings. TC Energy slumped 4.5% after raising its Coastal GasLink pipeline costs by 30%. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)
