The Toronto Stock Exchange (TSX) experienced a decline in stock prices, as optimism for an imminent rate cut faded. The technology sector, mirroring its U.S. counterparts, was a major contributor to these losses.
Additionally, concerns were raised about the timing of the Bank of Canada’s interest rate cut due to still-sticky inflation. The S&P/TSX composite index was down 0.14% at 21,800.29 points.
The rate-sensitive technology shares led the sectoral declines, falling by 0.7% as concerns grew over the timing of the U.S. Federal Reserve’s first interest rate cut. The glide path to the Fed’s 2% inflation target was described as anything but smooth, and timing was deemed uncertain. Carol Schleif, Chief Investment Officer at BMO Family Office, suggested that the earliest possible rate cut could happen in June, but it wouldn’t be surprising if it were delayed to later in the year due to recent hot data.
On the other hand, the materials sector experienced a 0.4% advance following the news of record-high Shanghai copper prices and London prices touching an 11-month peak. Chinese smelters agreed to trim production in response to weak profits and losses. This resulted in a positive boost for the materials sector on the TSX.
In terms of economic data, Canadian housing starts rose by 14% in February compared to the previous month. This increase was driven by groundbreaking on multiple-unit urban homes, as reported by the Canadian Mortgage and Housing Corporation (CMHC).
However, this housing data suggested that the Bank of Canada may not cut interest rates in the near future, further contributing to the decline in stock prices.
Most Traded Stocks on TSX
Several companies stood out as the most actively traded on the Toronto Stock Exchange. Canadian Natural Resources Ltd. (CNQ) saw its stock price rise by 0.02% to $99.61 on 18.4 million shares. Suncor Energy Inc. (SU) also experienced an increase of 1.88% to $48.81 on 16.8 million shares. Lundin Mining Corp. (LUN) witnessed a positive movement with a 1.65% increase to $12.94 on 12.7 million shares.
Conversely, TC Energy Corp. (TRP) saw a decrease of 0.67% to $54.67 on 11.4 million shares. BCE Inc. (BCE) faced a decline of 4.42% to $46.06 on 8.3 million shares. Another notable company was Bank of Nova Scotia (BNS), which experienced a decrease of 1.09% to $66.97 on 7.6 million shares.
Acquisitions and New Records
TMX, the operator of the Toronto Stock Exchange, recently made a significant acquisition of VettaFi, a data business, for a whopping $1 billion. This strategic move is expected to bolster listings on the exchange rather than push them down the agenda. TMX’s acquisition of VettaFi is part of a trend where exchanges are acquiring data companies, highlighting the increasing importance of information services in the industry.
Exchanges around the world are actively seeking to expand their offerings and enhance their competitiveness amid a smaller pool of floats. This acquisition by TMX reflects a broader trend of exchanges turning to acquisitions to bolster their listings. By incorporating data businesses, exchanges aim to provide more comprehensive services to attract companies and investors.
Conclusion
The Toronto Stock Exchange saw a decline in stock prices due to fading rate-cut optimism. The technology sector, as well as concerns over the Bank of Canada’s interest rate decision, played a significant role in this decline. Meanwhile, the most actively traded stocks on TSX experienced varying movements. Lastly, TMX’s acquisition of VettaFi for $1 billion is expected to positively impact listings on the exchange, in line with the broader trend of exchanges acquiring data businesses to expand their offerings and attract more companies and investors.
