TSX Remains Weak Despite Paring Some Losses; BoC Raises Interest Rates Again

After opening notably lower and declining further down, the Canadian market regained some lost ground Wednesday morning, but still remains in negative territory a little past noon.

Stocks tumbled a little before the Bank of Canada's interest rate decision, but slowly recovered post the central bank's announcement.

The BoC increased its target for the overnight rate by 25 basis points to 4.5%, in line with expectations.

The Canadian central bank also said it is continuing its policy of quantitative tightening, which it said is complementing the restrictive stance of the policy rate.

If economic developments evolve broadly in line with its outlook, the Bank of Canada expects to keep interest rates at their current level while it assesses the impact of the cumulative rate hikes.

The bank noted that it is prepared to increase rates further if needed to return inflation to the 2% target and remains resolute in its commitment to restoring price stability for Canadians.

The decision to continue raising rates comes as the bank said recent Canadian economic growth has been stronger than expected and the economy remains in excess demand.

The benchmark S&P/TSX Composite Index, which tumbled to 20,402.23, losing nearly 230 points in the process, is down 82.08 points or 0.39% at 20,547.47 a little past noon.

Industrials and energy stocks are the major losers. Technology stocks are finding support, while stocks from other sectors are turning in a mixed performance.

Technology stock Shopify Inc (SHOP.TO) is soaring nearly 10%.

Canadian National Railway (CNR.TO) is down 4.4%. The company reported operating income of C$1,912 million for the fourth quarter of fiscal 2022, an increase of 22%, or an increase of 21% on an adjusted basis, over the year-ago quarter.

Cargojet (CJT.TO) is down nearly 4%, while WSP Global (WSP.TO), Canadian Pacific Railway (CP.TO), Brookfield Business Partners (BBU.UN.TO) and Boyd Group Services (BYD.TO) are down 2.4 to 3%.

In the energy sector, Advantage Oil & Gas (AAV.TO) is down by about 5%. Tourmaline Oil Corp (TOU.TO), Peyto Exploration (PEY.TO), Birchcliff Energy (BIR.TO), Spartan Delta Corp (SDE.TO), Pason Systems (PSI.TO), Nuvista Energy (NVA.TO), Arc Resources (ARX.TO) and Baytex Energy (BTE.TO) are lower by 2 to 3%.

Data released by Statistics Canada showed manufacturing sales in Canada decreased 1.8% month-over-month in December of 2022, according to preliminary estimates.

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