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(Reuters) -Canada’s main stock market fell to its lowest closing level in nearly two months on Wednesday as two major banks reported quarterly earnings that missed analyst estimates and U.S. debt deal uncertainty weighed on investor sentiment.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 218.32 points, or 1.1%, at 19,927.69, its lowest closing level since March 29.
Bank of Montreal and Bank of Nova Scotia shed 3.9% and 1.3%, respectively. The lenders reported smaller-than-expected quarterly profits as they set aside more rainy day funds amid economic uncertainty.
“The bank earnings reflect that business is slowing down in general,” said Allan Small, senior investment advisor at Allan Small Financial Group. “We’re seeing a slowdown in the Canadian economy and the U.S. economy, which obviously affects our banks.”
The heavily-weighted financials sector fell 1.9%, while industrials lost 1.4% and the materials group, which includes precious and base metals miners and fertilizer companies, was down 2.2%.
Wall Street’s main indexes also ended lower as talks between the White House and Republican representatives on raising the U.S. debt ceiling dragged on without a deal that could avoid default.
A Reuters poll showed the TSX would rally less than previously expected in 2023, as higher borrowing costs cooled the domestic economy and signs that China’s recovery was slowing reduced prospects for its resource-oriented sectors.
