By Siddarth S
(Reuters) -Canada’s main stock index fell to more than three-week lows on Thursday as Fitch’s surprise downgrade of the U.S. credit rating fanned market worries, while dour forecast from the world’s biggest fertilizer company Nutrien weighed on materials sector.
At 10:23 a.m. ET (1423 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 117.91 points, or 0.58%, at 20,100.3. The index hit its lowest levels since July 12.
Ratings agency Fitch on Tuesday downgraded the U.S. government’s top credit rating, while investors and analysts said the downgrade is likely to exacerbate unease about the country’s debt position, political polarization and the global standing of the U.S. dollar.
“It (Fitch downgrade) really brings into focus and reminds people that we can’t fight inflation just with interest rates and monetary policy,” said Thomas Caldwell, chairman at Caldwell Securities Ltd.
“The main influence has been government spending and I think that’s what the downgrade really reflected.”
Shares of Nutrien Ltd fell over 3% after the world’s biggest fertilizer firm forecast full-year profit below analysts’ estimates on Wednesday.
Materials stocks fell 0.7%.
Gold prices fell over a three-week low, weighing further on the materials sector, which houses base and precious metal miners. [GOL/]
Rate-sensitive technology stocks dropped 1.2%.
Consumer discretionary sector slid 0.6% after Canadian shares of dually-listed Canada Goose Holdings, plunged over 6%.
The stock of luxury apparel brand was the worst performer on the benchmark index, after the company forecast current-quarter sales below Wall Street estimates.
Energy sector was a bright spot as it climbed 0.3%, tracking higher oil prices after Saudi Arabia extended its voluntary one million barrel per day output cut by another month to the end of September.
(Reporting by Siddarth S in Bengaluru; Editing by Milla Nissi and Shweta Agarwal)
