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TSX ends down 1% at 20,407.56
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Energy falls 4.6%; oil settles 5.3% lower
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Financials lose 1.8%
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Materials add 1.9% as gold rallies
(Adds investor quotes and details on activity, updates prices)
By Fergal Smith
May 2 (Reuters) - Canada's main stock index fell on
Tuesday as a sharp drop in the price of oil pressured energy
shares, while investors worried that higher borrowing costs
could slow the economy, leading to a volatile period for the
market.
The Toronto Stock Exchange's S&P/TSX composite index ended down 207.54 points, or 1%, at 20,407.56, its
lowest closing level since last Wednesday
"I think that what we are seeing today is the fact that
inflation and interest rates are at the top of everybody's
mind," said Michael Sprung, president at Sprung Investment
Management.
U.S. stock indexes also fell as investors fretted about the
impact of further interest rate hikes on the U.S. economy and
banking system.
The Federal Reserve is expected on Wednesday to raise
interest rates by 25 basis points to a range of 5% to 5.25%, its
highest level in nearly 16 years.
"People are still fearing this possibility of a recession
which has not yet happened but could well still happen," Sprung
said. "So I think that we are going to see a lot of radical
price changes over the next number of months as people try to
digest all this."
The Toronto market's energy sector led the declines, down
4.6%, as oil settled 5.3% lower at $71.66 a barrel.
Financials were also a drag, falling 1.8%.
The materials group, which includes precious and base metals
miners and fertilizer companies, helped limit the TSX's losses.
It added 1.9% as gold prices jumped.
(Reporting by Fergal Smith in Toronto; Additional reporting by
Shristi Achar A and Vansh Agarwal in Bengaluru; Editing by
Shilpi Majumdar and Marguerita Choy)
