Toronto market hits 10-day low as Fed uncertainty weighs – Financial Post

TORONTO — Canada’s main stock index fell on Monday, taking its cue from a pullback on Wall Street as investors worried about the economic impact of the Omicron coronavirus variant ahead of a Federal Reserve interest rate meeting this week.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 142.17 points, or 0.7%, at 20,748.45, its lowest closing level since Dec. 3.

“I’d say it’s more of a drag from the U.S. markets,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “I think they’re trying to figure out what the Fed is going to do.”

The U.S. central bank is expected to signal a faster wind-down of asset purchases when a two-day meeting wraps up on Wednesday.

Wall Street fell from record highs ahead of the Fed meeting. It included declines for travel-related stocks, as the fast-spreading Omicron variant accounted for around 40% of COVID-19 infections in London.

Omicron “was the wake-up call to everybody that there are still issues out there,” Cieszynski said, noting investor concerns about geopolitical uncertainty, supply chain problems and inflation.

The Bank of Canada unveiled an agreement with the federal government to keep its inflation target unchanged at 2%, adding that it would now take labor market factors into account as well, which could keep interest rates low for longer in times of crisis.

The Toronto market’s energy sector dropped 2.9% as oil prices declined. U.S. crude oil futures settled 0.5% lower at $71.29 a barrel.

Industrials fell 1.4%, while technology ended down 1.3%.

Rio Tinto has offered to write off Mongolia’s outstanding $2.3 billion debt for its share in the Oyu Tolgoi mine to advance the copper-gold project, the Asian country’s prime minister said.

Rio owns 51% of Turquoise Hill Resources, which owns 66% of the Oyu Tolgoi. Shares of Turquoise Hill ended 13.7% higher. (Reporting by Fergal Smith; Additional reporting by Amal S in Bengalurul; Editing by Jonathan Oatis)