Canadian stocks settled sharply lower Wednesday, tracking declining global equity markets after the U.S. Federal Reserve Chairman indicated a possible taper down of the stimulus program this year if the economy continues to improve. Investors weighed the Fed's optimistic outlook for the U.S. economy, viewing it as a probable indicator of stimulus reduction in the offing.
The U.S. Federal Reserve exuded optimism in its economic outlook for the country after its two-day policy meet. The Fed said it would maintain the pace of its $85 billion a month bond buying program, without giving any explicit indication of tapering the monetary stimulus soon. The Fed also held its its benchmark interest rate at effectively zero.
Despite mounting evidence of a robust recovery in the housing market, the Fed will wait for a significant drop in unemployment before scaling back its controversial asset purchase program. Policy makers did, however, note some improvement in the overall condition of the economy.
The S&P/TSX Composite Index closed Wednesday at 12,268.29, down 99.17 points or 0.80 percent. The index touched an intraday high of 12,365.48 and a low of 12,237.72.
The Global Gold Index dropped 2.50 percent, although gold futures for August delivery gained $7.10 or 0.5 percent to close at $1,374.00 an ounce Wednesday on the Nymex.
The Capped Materials Index shed 1.66 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) gaining 0.31 percent.
Among gold stocks, Yamana Gold Inc. (YRI.TO) slipped 2.48 percent, while Goldcorp Inc. (G.TO) fell 2.81 percent. IAMGOLD Corp. (IMG.TO) shed 2.69 percent, while Barrick Gold Corp. (ABX.TO) slipped 3.59 percent. Kinross Gold Corp. (K.TO) surrendered 3.59 percent, while B2Gold Corp. (BTO.TO) gained 0.42 percent.
The Diversified Metals & Mining Index dropped 1.88 percent, with First Quantum Minerals Ltd. (FM.TO) down 1.66 percent and Teck Resources Limited (TCK_B.TO) plunging 4.87 percent. Lundin Mining Corp. (LUN.TO) gained 0.71percent.
The Energy Index eased 0.45 percent, with U.S. crude oil futures for July delivery dropping $0.20 or 0.2 percent to close at $98.24 a barrel Wednesday on the Nymex.
Among energy stocks, Suncor Energy Inc. (SU.TO) dropped 0.76 percent, while Canadian Natural Resources Limited (CNQ.TO) slipped 0.40 percent. Enbridge Inc. (ENB.TO) shed 2.12 percent, while Talisman Energy Inc. (TLM.TO) gained 0.58 percent. Encana Corp. (ECA.TO) gained 0.76 percent, while Niko Resources (NKO.TO) plunged 5.94 percent.
The Financial Index lost 0.53 percent with Manulife Financial Corp. (MFC.TO) up 1.04 percent, Bank of Nova Scotia (BNS.TO) down 0.85 percent, and Bank of Montreal (BMO.TO) lost 0.91 percent. Royal Bank of Canada (RY.TO) eased 0.75 percent, while The Toronto-Dominion Bank (TD) dropped 0.52 percent.
The Information Technology Index slipped 0.78 percent, with BlackBerry (BB.TO) down 3.64 percent.
The Capped Industrials Index ended flat, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 1.54 percent.
In economic news, eurozone construction output increased in April, reversing the decline in March, data from Eurostat revealed Wednesday. Production in construction rose 2 percent month-on-month in April following a 1.8 percent drop in March and a 1.3 percent increase in February. Compared with April 2012, production decreased 6.6 percent. This followed a 7.3 percent year-on-year decline in March.
Spain's merchandise trade shortfall decreased significantly from last year in April as exports increased at a notably faster rate than imports, data from the country's Commerce Ministry showed Wednesday. The net trade for April resulted in a deficit of 1.64 billion euros, which was 51.1 percent lower than in the same month last year.
Elsewhere, Portugal's producer price inflation quickened moderately in May after easing in the previous month, data released by Statistics Portugal showed Wednesday. The producer price index increased 0.8 percent year-on-year in May, following the previous month's 0.5 percent gain. In March, the index recorded a 1.4 percent growth.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.