By Fergal Smith
TORONTO (Reuters) – Canada’s main stock index fell to a five-week low on Friday, pressured by lower oil prices and concern about the economic outlook following interest rate hikes this week by some major central banks.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 157.35 points, or 0.8%, at 19,443.28, its lowest closing level since Nov. 9. For the week, the index was down 2.5%, its second straight weekly decline.
U.S. stocks also ended lower as fears grew that the Federal Reserve’s quest to stifle inflation would push the economy into a recession. The central bank raised its policy rate by half a percentage point on Wednesday and signaled further tightening next year.
“Interest rates are impacting the American and Canadian stock markets to a significant degree,” said Thomas Caldwell, chairman at Caldwell Securities. “When America gets the sniffles, we (Canada) get pneumonia.”
The energy sector fell 2.7% as oil settled 2.4% lower at $74.29 a barrel. Its weighting on the TSX, at 19.5%, is second only to financials.
The utilities sector was also a drag, falling 1.7%, while industrials ended 0.9% lower.
Shares of Enghouse Systems were a bright spot, gaining 9.6% after the software company beat fourth-quarter profit estimates.
First Quantum Minerals Ltd shares remained volatile after Panama’s government on Thursday ordered the company to pause operations at its flagship copper mine. Its shares ended nearly 1% lower but clawed back much of their earlier decline.
(Reporting by Fergal Smith in Toronto; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Matthew Lewis)