CANADA STOCKS-TSX on course for quarterly fall on slowdown fears; Canopy Growth plunges

·2 min read

(Updates prices, adds analyst comments)

By Amal S

June 30 (Reuters) - Canada's main stock index fell on Thursday and was bound for its worst quarter in nine on rising worries of a sharp global economic slowdown, while a 20% drop in Canopy Growth dragged the healthcare sector lower.

At 9:45 a.m. ET (13:45 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 314.6 points, or 1.65%, at 18,764.04.

Markets worldwide fell to extend what is the worst first half of the year for global share prices on record, as investors fret that the latest show of central bank determination to tame inflation will slow economies rapidly.

"I think that fears over recession are continuing to drive sentiment at the moment, driven by central banks continuing to warn that the battle against inflation will likely be a long one, which is the basic message that came out of the ECB forum this week," said Stuart Cole, head macro economist at Equiti Capital.

Healthcare shares fell 4.5% dragged lower by a 20.3% drop in Canopy Growth after the pot producer announced convertible notes exchange.

The benchmark index, down 14% so far this quarter, was on track to record its worst quarterly performance since the pandemic-led slump in March 2020.

The energy sector dropped 1.6% on weaker crude prices, while the materials sector, which includes precious and base metals miners and fertilizer companies, lost 2.1% tracking weakness in copper prices.

Canada's economy grew 0.3% in April, matching analyst expectations, driven largely by the oil and gas sector, but based on a preliminary estimate it likely contracted 0.2% in May, according to Statistics Canada.

"If you look at the monthly figures they point to a slowing in activity - we have now had a third consecutive month of slowing growth - and it is hard to see this reversing quickly given the aggressive monetary policy stance being taken by the Bank of Canada," Cole added.

Both financials and industrials sector slipped 1.8% each.

(Reporting by Amal S in Bengaluru; Editing by Vinay Dwivedi)

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