Canada Stocks Fall as Investors Eye BoC Rate Decision

The S&P/TSX Composite index extended losses to close 1.2% lower at 20,242 on Monday, moving further away from last Thursday's six-month high and weighed down by losses in the policy-sensitive technology sector, as investors await the Bank of Canada's interest rate meeting due later this week.

Traders are pricing in a nearly 69% chance of a 25-bps hike to 4%, further slowing the pace of its tightening cycle, as policymakers aim to ease the risk of overtightening following a surprise 50-bps rate increase delivered last month.

According to the latest projections, the BoC expects growth to broadly stall in the fourth quarter until returning to slight growth in the second half of 2022.

At the same time, the materials group, which includes precious and base metals miners and fertilizer companies, fell 1.6% as gold and copper prices declined, while the energy sector was hit by a sharp drop in the price of oil.