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Toronto Stock Exchange falls as Bank of Canada holds rates

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Toronto Stock Exchange

Toronto Stock Exchange falls in negative territory following a lower open on Wednesday after the Bank of Canada held its key lending rate steady, while heavyweight financial stocks declined.

* At 10:06 a.m. ET (1406 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 74.52 points, or 0.37%, at 19,991.4.

* The Bank of Canada left its key interest rate unchanged at 0.25%, as expected, and said it would maintain its current policy of quantitative easing.

* Eight of the index’s 11 major sectors were trading lower, led by the financials sector, which slipped 0.8%.

* The energy sector dropped 0.2% as U.S. crude prices were up 0.6% a barrel, while Brent crude added 0.8%. [O/R]

* The materials sector, which includes precious and base metals miners, added 0.1% as gold futures rose 0.3% to $1,897.7 an ounce. [GOL/]

* Dollarama Inc reversed early declines to rise 1.1%, even as the company said its current-quarter earnings would take a hit from fresh COVID-19 restrictions in certain Canadian provinces.

* On the TSX, 96 issues were higher, while 127 issues declined for a 1.32-to-1 ratio to the downside, with 35.39 million shares traded.

* The largest percentage gainers on the TSX were Tilray Inc Ord, which jumped 9.4%, followed by OrganiGram Holdings, which rose 6.3%.

* Blackberry Ltd fell 4.4%, the most on the TSX, while the second biggest decliner was Jamieson Wellness Inc, down 2.5%.

* The most heavily traded shares by volume were Auxly Cannabis Group Inc, Blackberry Ltd and Rogers Communication Inc.

* The TSX posted 11 new 52-week highs and no new low.

* Across all Canadian issues there were 51 new 52-week highs and two new lows, with total volume of 68.91 million shares.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Aditya Soni and Shailesh Kuber)

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Economy

Canadian retail sales slide in April, May as COVID-19 shutdown bites

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december retail sales

Canadian retail sales plunged in April and May, as shops and other businesses were shuttered amid a third wave of COVID-19 infections, Statistics Canada data showed on Wednesday.

Retail trade fell 5.7% in April, the sharpest decline in a year, missing analyst forecasts of a 5.0% drop. In a preliminary estimate, Statscan said May retail sales likely fell by 3.2% as store closures dragged on.

“April showers brought no May flowers for Canadian retailers this year,” Royce Mendes, senior economist at CIBC Capital Markets, said in a note.

Statscan said that 5.0% of retailers were closed at some point in April. The average length of the closure was one day, it said, citing respondent feedback.

Sales decreased in nine of the 11 subsectors, while core sales, which exclude gasoline stations and motor vehicles, were down 7.6% in April.

Clothing and accessory store sales fell 28.6%, with sales at building material and garden equipment stores falling for the first time in nine months, by 10.4%.

“These results continue to suggest that the Bank of Canada is too optimistic on the growth outlook for the second quarter, even if there is a solid rebound occurring now in June,” Mendes said.

The central bank said in April that it expects Canada’s economy to grow 6.5% in 2021 and signaled interest rates could begin to rise in the second half of 2022.

The Canadian dollar held on to earlier gains after the data, trading up 0.3% at 1.2271 to the greenback, or 81.49 U.S. cents.

(Reporting by Julie Gordon in Ottawa, additional reporting by Fergal Smith in Toronto, editing by Alexander Smith)

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Canadian dollar notches a 6-day high

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Canadian dollar

The Canadian dollar strengthened for a third day against its U.S. counterpart on Wednesday, as oil prices rose and Federal Reserve Chair Jerome Powell reassured markets that the central bank is not rushing to hike rates.

Markets were rattled last week when the Fed shifted to more hawkish guidance. But Powell on Tuesday said the economic recovery required more time before any tapering of stimulus and higher borrowing costs are appropriate, helping Wall Street recoup last week’s decline.

Canada is a major producer of commodities, including oil, so its economy is highly geared to the economic cycle.

Brent crude rose above $75 a barrel, reaching its highest since late 2018, after an industry report on U.S. crude inventories reinforced views of a tightening market as travel picks up in Europe and North America.

The Canadian dollar was trading 0.3% higher at 1.2271 to the greenback, or 81.49 U.S. cents, after touching its strongest level since last Thursday at 1.2265.

The currency also gained ground on Monday and Tuesday, clawing back some of its decline from last week.

Canadian retail sales fell by 5.7% in April from March as provincial governments put in place restrictions to tackle a third wave of the COVID-19 pandemic, Statistics Canada said. A flash estimate showed sales down 3.2% in May.

Still, the Bank of Canada expects consumer spending to lead a strong rebound in the domestic economy as vaccinations climb and containment measures ease.

Canadian government bond yields were mixed across a steeper curve, with the 10-year up nearly 1 basis point at 1.416%. Last Friday, it touched a 3-1/2-month low at 1.364%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)

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Economy

Toronto Stock Exchange higher at open as energy stocks gain

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Toronto Stock Exchange edged higher at open on Wednesday as heavyweight energy stocks advanced, while data showing a plunge in domestic retail sales in April and May capped the gains.

* At 9:30 a.m. ET (13:30 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 16.77 points, or 0.08%, at 20,217.42.

(Reporting by Amal S in Bengaluru; Editing by Sriraj Kalluvila)

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