TSX Slightly Up In Cautious Trade After BoC Hikes Rates And Signals Further Hikes

(RTTNews) - Canadian shares are swinging between gains and losses on Wednesday with investors digesting the Bank of Canada's interest rate decision, and tracking global markets where stocks fell amid rising concerns over inflation and rate hikes.

Energy stocks are up thanks to higher crude oil prices. Shares from the industrial sector are among the other prominent gainers.

Healthcare stocks are down sharply. Several stocks from the technology space are also down with sharp losses.

The benchmark S&P/TSX Composite Index, which climbed to 20,866.36 in early trades, but dropped to a low of 20,610.19 subsequently, was up 69.25 points or 0.33% at 20,798.59 a little while ago.

The Bank of Canada this morning raised its interest rate by 50 basis points to 1.5% as expected, and signaled further hikes to control high inflation.

With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the Governing Council continues to judge that interest rates will need to rise further, according to the accompanying statement.

The bank said that it is continuing its policy of quantitative tightening, and added that the pace of further increases in the policy rate will be guided by its ongoing assessment of the economy and inflation, and the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2 percent inflation target.

Meanwhile, a report from Markit Economics showed the S&P Global Canada Manufacturing PMI rose to 56.8 in May of 2022 from 56.2 in the previous period, marking the 23rd consecutive month of expansion.

The Energy Capped Index is up nearly 2%. Vermilion Energy (VET.TO) is gaining 5.85%, Birchcliff Energy (BIR.TO) is up 3.5%, while Parex Resources (PXT.TO), Cenovus Energy (CVE.TO), Peyto Exploration and Development (PEY.TO), Enerplus Corp (ERF.TO), Arc Resources (ARX.TO), Canadian Natural Resources (CNQ.TO), Imperial Oil (IMO.TO), Nuvista Energy (NVA.TO) and Baytex Energy (BTE.TO) are advancing 2 to 3%.

Cae Inc (CAE.TO), up 6.5%, is the top gainer in the Industrials Index. WSP Global (WSP.TO) is gaining 5%, while Lifeworks (LWRK.TO), Canadian Pacific Railway (CP.TO), Stantec Inc (STN.TO) and Richelieu Hardware (RCH.TO) are up 2 to 2.5%.

In the healthcare section, Aurora Cannabis (ACB.TO) is plunging more than 7%, Canopy Growth Corp (WEED.TO), Tilray Inc (TLRY.TO), Well Health Technologies (WELL.TO) and Cronos Group (CRON.TO) are down 4.7 to 6%, while Bausch Health Companies (BHC.TO) is declining 1.4%.

Hut 8 Mining Corp (HUT.TO), down 11%, is the biggest loser in the Technology space, Dye & Durham (DND.TO) is down nearly 8% and BlackBerry (BB.TO) is down 6.1%. Nuvei Corp (NVEI.TO), Shopify Inc (SHOP.TO), Converge Technology Solutions (CTS.TO) and Lightspeed Commerce (LSPD.TO) are lower by 3 to 5%.