The Canadian market opened on a low note on Wednesday, as investors braced for the Bank of Canada’s (BoC) monetary policy decision later in the day. The Toronto Stock Exchange’s S&P/TSX composite index fell 0.69% at 9:31 a.m. ET, with industrial and consumer discretionary stocks leading the decline.
The BoC is widely expected to hold interest rates steady, with policymakers keeping a close eye on the economic impact of the COVID-19 pandemic and the effectiveness of the vaccine rollout. The central bank is also expected to provide an update on its quantitative easing program, which has played a significant role in supporting the Canadian economy during the pandemic.
Investors are also keeping a close eye on the U.S. Federal Reserve’s monetary policy decision, which is set to be announced later in the day. The Fed is expected to continue its accommodative monetary policy stance, with policymakers keeping interest rates at near-zero levels to support the economic recovery.
The Canadian market has been on a bullish run in recent months, with the S&P/TSX composite index reaching record highs on the back of strong corporate earnings and a rebound in commodity prices. However, investors remain cautious as the market faces headwinds from rising bond yields and uncertainty surrounding the economic recovery.
In terms of sectors, the industrials and consumer discretionary sectors were among the worst performers, with Bombardier Inc. and Canadian National Railway Co. both falling more than 1%. On the positive side, the healthcare sector was the best performer, with Bausch Health Companies Inc. and Canopy Growth Corp. both rising more than 1%.
Overall, investors will be closely monitoring the BoC’s monetary policy decision and the Fed’s statement for any indication of the direction of the economy. The market is expected to remain volatile in the near term as investors navigate the uncertainties surrounding the economic recovery.
