TSX HITS FIVE-WEEK LOW AS INVESTORS EYE TAX HIKE RISK

By Fergal Smith

(Reuters) -Canada's main stock index fell to a five-week low on Monday as long-term borrowing costs climbed and investors worried that this week's federal budget would propose raising taxes.

The Toronto Stock Exchange's S&P/TSX composite index ended down 159.79 points, or 0.7%, at 21,740.20, its lowest closing level since March 8.

"It's partially nerves over the upcoming budget," said Michael Sprung, president at Sprung Investment Management. "People are concerned about what the tax implications might be given how much this government is spending."

Canadian Finance Minister Chrystia Freeland will have to find ways to amp up savings or raise taxes when she delivers the budget on Tuesday, as new heavy spending plans in the run-up further risks weakening government finances, economists say.

U.S. stocks also fell as an early lift from a strong retail sales report gave way to a jump in Treasury yields and concerns about rising tensions in the Middle East.

"I think that inflation is going to prove to be a little bit more persistent than people want and the amount of financing that is going to be required from corporate, personal and governments over the next few years is going to put pressure on rates," Sprung said.

Canada's consumer price index report for March is also due on Tuesday. It is expected to show inflation rising to an annual rate of 2.9% from 2.8% in February.

The Toronto market's energy sector fell 1.7% as the price of oil settled 0.3% lower to $85.41 a barrel.

The materials group, which includes metal miners and fertilizer companies, was down 0.9% even as gold climbed to a fresh record high.

Heavily weighted financials fell 0.6% and technology was down 1.3%.

(Reporting by Fergal Smith in Toronto and Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar and Jonathan Oatis)

2024-04-15T20:30:17Z dg43tfdfdgfd