(New everywhere, updates prices, market activity and comments to close)
* The TSX ends down 488.78 points, or 2.3%, at 20,696.17
* The index shows its biggest drop since November 30, 2021
* Technology drops 6.5%; Shopify ends down 14.3%
* The materials sector loses nearly 3%
By Fergal Smith
TORONTO, May 5 (Reuters) – Canada‘s main stock index fell on Thursday, reversing most of a two-day rally, as e-commerce giant Shopify missed quarterly earnings estimates and investors fear the Federal Reserve raises interest rates aggressively.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended down 488.78 points, or 2.3%, at 20,696.17, its biggest decline since Nov. 30, 2021, after posting solid gains on Tuesday and Wednesday.
“We had a huge relief rally yesterday due to less fear from the Fed and that is reversing today on everything,” said Matt Skipp, president of SW8 Asset Management.
Major Wall Street indexes also tumbled as investors feared the Fed’s half-percentage-point rate hike on Wednesday would not be enough to bring inflation under control and that the U.S. central bank would need to take action. more drastic.
The Toronto market’s information technology sector fell 6.5%, paced by a 14.3% decline for shares of Shopify Inc, as the e-commerce giant reported its weakest quarterly revenue growth in about seven years and realized a big shortfall.
“The repricing of growth and speculative stocks continues unabated,” Skipp said. “It has a snowball effect…it leads to forced selling because of margin calls.”
Shares of Bombardier Inc fell 8.3% even as the business jet maker reported a lower adjusted quarterly loss.
This weighed on the industrials group, which fell 2.7%, while heavily weighted financials ended down 1.9%.
The materials group, which includes precious and base metal miners and fertilizer companies, lost nearly 3.0% as gold and copper prices fell. (Reporting by Fergal Smith; Additional reporting by Bansari Mayur Kamdar and Susan Mathew in Bengaluru; Editing by David Gregorio)