Canadian Stocks Climb Well Off Worst Levels But Close Modestly Lower

After coming under pressure early in the session, Canadian stocks showed a significant recovery attempt over the course of the trading day on Wednesday.

The benchmark S&P/TSX Composite Index climbed well off its worst levels of the day but still closed down 29.95 points or 0.2 percent at 20,599.60.

The initial weakness on Bay Street partly reflected a negative reaction to earnings news from big-name companies like Microsoft and Boeing.

The subsequent recovery attempt may have reflected optimism the Bank of Canada is done raising interest rates following a quarter-point rate hike this morning.

As widely expected, the Bank of Canada increased its target for the overnight rate by 25 basis points to 4.5 percent.

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.

However, the Bank of Canada said it expects to keep interest rates at their current level while it assesses the impact of the cumulative rate hikes.

Despite the recovery attempt by the broader market, significant weakness remained visible among industrial stocks, with the S&P/TSX Capped Industrial Index tumbling by 2.1 percent.

Energy stocks also saw considerable weakness even though the price of crude oil finished the day slightly higher.

On the other hand, technology and gold stocks showed strong moves to the upside as the day progressed, contributing to the recovery attempt.

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