* TSX ends down 0.7% at 34,041.43
* Tech declines 1.1%, with Shopify down 4.5%
* Financials end 1.1% lower
* Boyd Group slumps nearly 12% after sales miss (Updates at market close)
TORONTO, May 13 (Reuters) – Canada’s main stock index gave back some recent gains on Wednesday, weighed by declines for financial and technology shares, after U.S. data added to evidence of accelerating inflation.
The Toronto Stock Exchange’s S&P/TSX Composite index ended down 249.30 points, or 0.7%, at 34,041.43, after notching on Tuesday its highest closing level in three weeks.
“I would expect some of the issues are around inflation pressures,” said Kevin Headland, co-chief investment strategist at Manulife Investments “We had U.S. PPI a lot higher than expected.”
U.S. producer prices posted their biggest increase in four years in April, boosted by soaring costs for goods and services, the latest sign of accelerating inflation amid the war with Iran.
“The yield curve is pretty flat and of course ideally what you want to see is a bit of a steep yield curve for the banks,” Headland said.
The gap between Canada’s 2-year and 10-year yields has narrowed to about 60 basis points from 85 basis points at the start of the year. Investors have priced in two interest rate hikes from the Bank of Canada after the surge in oil prices boosted the inflation outlook.
Minutes from the central bank’s latest meeting showed that policymakers felt they could afford to be patient on moving rates but that the situation might change quickly.
The financials sector fell 1.1%, with shares of goeasy Ltd ending 5.1% lower after the consumer lender reported a deeper than expected loss.
Shares of e-commerce company Shopify Inc lost 4.5% to hit their lowest level since May last year, which contributed to 1.1% decline for technology. Shares of Boyd Group Services Inc, which runs autobody and auto glass repair facilities across North America, slumped nearly 12% after the company missed analysts’ expectations for first-quarter sales.
The consumer staples sector fell 0.7%, consumer discretionary was down 1.5% and industrials ended 0.9% lower. (Reporting by Fergal Smith in Toronto and Tharuniyaa Lakshmi and Sruthi Shankar in Bengaluru; Editing by Joyjeet Das and Alistair Bell)
