TSX futures fall after sharp rally as economic worries mount

09/29/2022 | 07:43am

(Reuters) - Futures tracking Canada's main stock index fell on Thursday after a sharp market rally in the previous session, as aggressive monetary-policy tightening globally fans fears of a steep economic downturn.

September futures on the S&P/TSX index were down 0.6% at 07:16 a.m. ET, a day after the TSX logged its biggest one-day advance since May 13 as the Bank of England moved to support Britain's beaten-down government debt market. [.TO]

This year has been an uphill battle against rising inflation for central banks around the world, which have been increasing interest rates to tame high prices even at the cost of economic slowdown.

Gold prices fell 0.6% as a stronger dollar hampered the appetite for the yellow metal, with looming rate hikes still a headwind for the non-yielding bullion. [GOL/]

Meanwhile, July reading on Canada's economic growth, due at 08:30 a.m. ET, is expected to show real GDP edged down 0.1% in July, reversing June's gain of 0.1%.

The commodity-heavy TSX has fallen in last six out seven sessions and is down 3.5% so far in September, setting it for a second straight monthly and quarterly decline.

The Bank of Canada (BoC) said on Wednesday it would begin publishing a summary of its monetary policy deliberations, similar to U.S. Federal Reserve, starting next year, which economists said could help avoid unnecessary market volatility.

Trader are pricing in a 65.3% chance of a 50 bps hike by the BoC next month. Canada's apex bank has raised its overnight lending rates by 300 basis points in six months.

Dow e-minis were down 148 points, or 0.5%, at 07:16 a.m. ET, while S&P 500 e-minis were down 24.5 points, or 0.66%, and Nasdaq 100 e-minis were down 112.25 points, or 0.97%. [.N]

On the research front, Barclays reinstated coverage on Royal Bank of Canada with an "overweight" rating, and PT of C$137.

Pot company High Tide will acquire Jimmy's Cannabis shop in all-stock deal worth $5.3 mln.

FOR CANADIAN MARKETS NEWS, CLICK ON CODES:

TSX market report [.TO]

Canadian dollar and bonds report [CAD/] [CA/]

Reuters global stocks poll for Canada

Canadian markets directory

($1 = C$1.37)

(Reporting by Shashwat Chauhan; Editing by Vinay Dwivedi)

Reuters 2022
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