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Banks drag TSX down on bearish brokerage action
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Pet Valu Holdings down after Q1 profit declines
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Finning International up as Q1 results beat estimates
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TSX down 0.4%
(Updates prices throughout, adds sector moves and analyst
comments in paragraphs 7 and 8)
By Shashwat Chauhan and Vansh Agarwal
May 9 (Reuters) - Canada's main stock index fell on
Tuesday, weighed down by financial stocks after Barclays
downgraded several banks, while investors remained cautious
ahead of U.S. inflation data due on Wednesday.
At 10:34 a.m. ET (1434 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 74.34 points, or 0.36%, at 20,510.81. Heavyweight financial index fell 1.0% after Barclays downgraded three major Canadian banks. Royal Bank of Canada fell 1.7% on Barclays' double downgrade to "underweight" from "overweight".
Bank of Nova Scotia and Toronto-Dominion Bank fell 2.7% and 1.4%, respectively, on the brokerage's rating cuts. Investors will parse the U.S. April consumer price inflation (CPI) data for signs on Federal Reserve's policy outlook in what market expects to be the end in a historic series of interest rate hikes.
"Coming into this earnings season, the bar was set pretty low both in Canada and in the U.S.," said Allan Small, senior investment advisor at Allan Small Financial Group. "Overall earnings season has been very good, beating a low bar but still not the number one driver of market movements, that's more to do with the Fed and interest rate policy."
Canadian earnings season is to pick-up pace this week.
Pet Valu Holdings fell 4.8% after the retailer reported a decline in first-quarter profit versus a year earlier. Finning International gained 4.5% after the caterpillar equipment dealer posted better-than-expected first-quarter results. Canada's technology sector slipped 0.1%, dragged down by a 1.2% decline in Shopify . (Reporting by Shashwat Chauhan and Vansh Agarwal in Bengaluru; Editing by Shailesh Kuber)
