Canada Stocks Lose 135 Points On Dovish Fed Update

Wednesday, September 16, 2020 4:08 PM | MT Newswires

Canada's main stock exchange, the Toronto Stock Exchange, failed to extend its run of three winning days, for a total gain of near 240 points, in falling near 135 points to day lows below 16300 on Wednesday, close to 200 points below session highs hit in the morning. North American stock markets started to give back gains ahead of the FOMC's afternoon update, but the losses increased as the market fully digested its announcement, which was about as dovish as expected.

According to BNN Bloomberg TV, there was a switch in to the cyclical sectors such as Energy and Industrials, and out of Technology. Here on the TSX, Energy rose 1%, but Industrials los 1.45% and Financials eased 0.65%.

Of commodities, West Texas Intermediate crude oil pushed back above the $40 per barrel mark on Tuesday following a report that showed an unexpected drop in U.S. oil inventories, while the arrival of Hurricane Sally in the Gulf of Mexico forced the shut-in of 27% of the gulf's oil production. WTI crude for October delivery closed up $1.88 to US$40.16 per barrel, Marketwatch reported, the highest since Sept.4, November Brent crude was last seen up $1.71 to US$42.24 while Western Canada Select was up $1.85 to US$32.24 per barrel. The gains came the Energy Information Administration said U.S. oil inventories fell by 4.4 million barrels last week, while a rise of 1.5 million barrels was seen. However the American Petroleum Institute a day earlier reported a 9.5 million barrel drop in inventories.

Elsewhere, gold ended up even as the U.S. dollar recovered from overnight lows as the Federal Reserve signalled it is unlikely to raise ultra-low interest rates for at least three years. Gold for December delivery was last seen up $4.30 to US$1,970.50 per ounce in Comex trade.

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